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JB Hi-Fi result a stand-out


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Home entertainment retailer JB Hi-Fi’s 10 per cent profit increase has been welcomed by shareholders, adding more than $90 million to its market value.

But the electronics and DVD seller’s good news is not necessarily a sign that all is well in Australia’s retail space, an analyst says.

JB Hi-Fi’s share price climbed by more than five per cent on Tuesday after announcing that net profit had climbed by 10 per cent in the six months to December 31.

Sales also increased strongly during that period.

The retailer’s results are more a reflection on a good business model rather than a sign of a recovery in Australia’s retail sector, Invast Securities chief market analyst Peter Esho says.

“Overall, it’s a pretty good report card, considering the broader economic circumstances,” he told AAP.

“I wouldn’t draw too many comparisons from this and the rest of the retail space – there’s anecdotal evidence it’s not widespread.

“Good retailers are holding … their ground and are very well placed for a recovery while those with a vulnerable business model are not automatic beneficiaries of lower interest rates.”

JB Hi-Fi’s net profit after tax for the six months to December 31 rose by 10 per cent to $90.3 million, compared with the corresponding period in 2012.

During that time, total sales grew by 6.8 per cent to $1.94 billion, while comparable sales based on existing stores increased by 2.8 per cent.

“That’s really what the market was looking at, not necessarily the contribution from the new stores but the fact like for like growth was up almost three per cent,” Esho said.

JB Hi-Fi opened 13 new stores and closed three during the 2012/13 financial year.

The good news for JB Hi-Fi comes only four days after the Reject Shop reported a disappointing Christmas sales period.

On Tuesday, homewares retailer McPherson’s announced it expected half year underlying net profit to fall by two per cent, compared with the same time in 2012, because of weaker margins.

JB Hi-Fi shares rose by 90 cents, or 4.92 per cent, to close at $19.19 on Tuesday.

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