By Jason Whittaker Inventory is down and profits have soared to record highs at retailer David Jones, defying the economic downturn
Inventory is down and profits have soared to record highs at retailer David Jones, defying the economic downturn to post big full-year margins.
The company has today reported its highest full-year profit result since its 1995 Stock Exchange listing, generating $65.4 million after tax in the second half which is 36 percent higher than last year.
David Jones CEO Mark McInness says the period was “extremely challenging”, with sales revenue for the year of $1.98 billion down 5.4 percent on the previous year.
Yet the company still managed to deliver a record profit and dividend.
“Our ability to deliver both profit and dividend growth over the past 12 months demonstrates the strength of our business model,” he says.
Part of that model includes reducing inventory levels, with the company reporting its stock position in 2009 was 4.8 percent lower than the previous financial year.
Inventory was “well managed”, David Jones says, “which means it has a very clean inventory position entering into FY10”.
The company has also planned a further 58 cost efficiency programs until 2012 that will “substantially reduce” its cost base.
McInness says the company now has a “solid foundation” for future growth as the economy recovers.
“Historically David Jones is first-in and first-out of a downturn, our company has a track record of growing profits following a downturn and we are well positioned to take advantage of the next up-cycle,” he says.
“The next cycle in the economy is an upturn.”