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JB Hi-Fi boosted by Dick Smith collapse

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JB Hi-Fi expects the collapse of Dick Smith electronic stores to continue to boost its sales growth throughout the first half of the current financial year.

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The optimism comes after the consumer electronics and home appliances retailer’s profit jumped more than 11 per cent to $152.2 million in the wake of Dick Smith’s collapse.

Revenue for the 12 months to June 30 rose 8.3 per cent to $3.95 billion, with comparable sales, a key measure of sales growth, up 5.4 per cent.

The results beat the company’s guidance of up $143m-$147 million in net profit and revenue of around $3.9 billion in its market update in February.

JB HI-FI chief executive Richard Murray said the overall result was pleasing given the group was cycling a strong June in the prior year.

He said the group has had a good start to the 2017 financial year, with pleasing sales growth in July, partly due to strong movie sales on the back of promotions.

The closure of Dick Smith stores during the second half of fiscal 2016 has contributed to an increase in sales of computer, movies, music and accessories, he added.

“We anticipate this will continue to drive sales growth in the first half of FY17; however the impact will moderate as we cycle through their decline and eventual market exit,” he said in an ASX statement today.

The retailer will launch another share buyback intended to offset the dilutionary impact of shares to be issued under the company’s share option plans and deferred short-term incentive plan in fiscal 2017.

It will spend about $11.8 million on an on-market buyback and could spend more on further capital management initiatives.

JB Hi-Fi said it had not made a decision nor entered into a sale agreement with to buy The Good Guys, but negotiations were continuing.

Shares in JB Hi-Fi jumped by $1.90, or 6.94 per cent, to $29.28 at 1030 AEST.

-AAP

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