Bendigo and Adelaide Bank Ltd

BEN Details

Bendigo and Adelaide Bank, announced an after tax statutory profit of $429.6 million for the 12 months ending 30 June 2017. Underlying cash earnings grew 4.2% yoy to $418.3 million on the prior financial year. Cash earnings per share stood at 88.5 cents, a 1.2 cent increase on the 2016 financial year. The Bank has retained a final fully franked dividend of 34 cents per share, with a 1.5% discount for shares issued under both the Dividend Reinvestment Plan and Bonus Share Scheme also announced. The Bank has experienced above system growth, indicating its focus on providing customers with the leading experience in financial services. Recently APRA’s lending caps have somewhat restricted that strong lending growth across the Retail (7.7% for the year), and Third-Party channels. However, margin expansion was strong in the second half, up 8 basis points half on half, with an exit margin of 2.34%.  In part, this was driven by the need for mortgage repricing to respond to those regulatory caps on interest only and investor growth.


Financial performance; (Source: Company reports)

The Bank’s funding position continues to be industry leading, providing flexibility for executing on growth opportunities. Deposit gathering is a real strength for Bank and a testament to the advocacy for style of banking and Retail deposits are up 4.7% this year. Solid growth in at call and term deposits sees 80.2% of funding provided by retail customers. Further, focus on efficiency has resulted in expenses remaining flat year on year, and cost to income ratio moved down to 56.1%, as productivity gains flow from continued investment in technology and continuous improvement. Common Equity Tier1 Capital stood at 8.27%, and the banks’ ability to organically generate capital will enable it to achieve APRA’s unquestionably strong capital benchmarks well within the required timeframe.


BEN Daily Chart (Source: Thomson Reuters)

JB Hi-Fi Limited

JBH Details

JB Hi-Fi Limited reported 36.5% yoy growth in net profit after tax (NPAT) at $207.7 million (FY16: $152.2 million) from $5.6 billion of sales (FY16: $3.95 billion) for the full year ended 30 June 2017 (FY17). Total sales grew by 42.3% yoy, group EBIT was up 38.5% on the pcp to $306.3 million and EPS was up 22.4% to 186 cps.

Australian sales grew by 10.9% to $4.15 billion, with comparable sales up 8.6%, led by the Communications, Audio, Cameras, Accessories, Computers and Home Appliance categories. In FY17 online sales grew 38.4% to $158.9 million or 3.8% of total sales, reflecting continuous improvement across many aspects of the business’s digital assets. JB Hi-Fi Solutions continued to grow and remains on track to deliver on its longer term aspirational sales target of approximately $500 million per annum. Gross profit increased by 11.7% to $922.8 million resulting in a gross margin of 22.2%, however, CODB was down 21 bps on the pcp to 15.0%. Total operating costs were in line with management’s expectations and remained well controlled as the business continued to deliver the high standard of customer service. Moreover, the business’s low CODB remains a competitive advantage and is maintained through continued focus on productivity and minimising unnecessary expenditure. Strong sales growth, combined with operating cost leverage, drove strong earnings growth. EBIT was up 19.1% on the pcp to $262.4 million while EBIT margin was up 43 bps at 6.3%.

Total sales from New Zealand were down 0.3% to NZD234.0 million, with comparable sales down 8.8%. Sales in the prior year were aided by market wide demand for third party content cards. Excluding the impact of these cards (NZD8.4m), total sales in New Zealand were up 3.4%, with comparable sales down 5.3%. Online sales in New Zealand for FY17 grew 5.3% to NZD4.9 million or 2.1% of total sales. Considering the challenging recent financial performance in New Zealand, fixed asset and goodwill impairments totalling AUD15.8 million were recorded in the statutory FY17 results.


Group performance overview; (Source: Company reports)

The Good Guys was acquired on 28 November 2016. For the period under JB HI-FI ownership, total sales were up 0.2% to $1.26 billion with comparable sales down 1.3%. Key growth categories were Cooking, Seasonal Products, Visual, Refrigeration and Laundry. Online sales were $64.4 million or 5.1% of total sales. Earnings for the period under JB HI-FI ownership of $46.4 million were pleasing and in line with the pcp. For FY18, the company expects total Group sales to be circa $6.8 billion (JB HI-FI $4.65 billion and The Good Guys $2.15 billion).


JBH Daily Chart (Source: Thomson Reuters)

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