Sep 20, 2019
Australia's Premier Investments annual profit surges, shares jump 23%
Sep 20, 2019
Australia’s Premier Investments Ltd defied a retail downturn to post sharply higher annual profit on Friday, driving its shares up 23% to post their best intraday gain in almost 18 years.
The specialty retailer logged a 28% jump in net profit to A$106.8 million ($72.51 million) in the 12 months ended July 27, mainly boosted by strong growth in the apparel segment, its biggest business.
The results come at a time when the nation appears to be recovering from a housing downturn, which had crimped consumer spending and led to warnings from major retailers of a tough operating environment.
Premier’s upbeat results by may embolden billionaire Chairman Solomon Lew in his criticism of struggling department store chain Myer Holdings, where Premier is the biggest shareholder.
Lew, who has unsuccessfully attempted to install three directors on Myer’s board in the past, has been disparaging of the company’s efforts to ramp up sales online.
Last year, Lew asked Myer for a full list of its owners, stoking speculation that a takeover or board spill was in the offing.
Since then Myer, the 119-year-old retailer that largely operates out of brick-and-mortar stores, has ditched low-margin brands and cut floorspace and jobs as a part of Chief Executive John King’s turnaround plan.
Myer’s full-year results earlier this month showed signs the plan may be paying off, with the company returning to profit and online sales jumping.
On Friday, Premier also bumped up its final dividend to a record 37 cents per share and reaffirmed its target A$450 million annual global sales target for stationery arm Smiggle by fiscal 2021 or 2022.
Shares of Premier surged as much as 23%, their best since November 2001, and were last up 20%.
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