Super Retail Group (SUL)

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24 August 2020

Results 

Full Year 2020

Full Year 2019

Change

Group Sales ($m)

2,825.2

2,710.4

+4.2%

Online Sales ($m)

291

201

+44%

Earnings Before Interest & Tax (EBIT) ($m)

236.1

228.1

+3.5%

EBITDA ($m)

328.1

314.7

+4.3%

Normalised NPAT ($m)

154

152.5

+1%

Reported NPAT ($m)

110

139.2

-20.9%

Final Dividend ($)

0.195

0.285

-31.6%

Super Retail (SUL) sales lift as demand for outdoor activities builds    

What happened?

  • Super Retail Group (SUL) reported a lift in sales over the past financial year to $2.8 billion, a gain of 4.2% as like-for-like (LFL) or comparable sales grew 3.6%. There were no major surprises in the numbers released by SUL with the retail group providing a sales and trading update less than a month ago. Earnings for the year rose as did normalised net profit after tax. Reported NPAT, which includes one-offs and accounting standard changes, fell 20.9% to $110 million.
  • SUL announced a final dividend of 19.5 cents per share, which is a drop of 31.6% on the same time last year. The payout is at the bottom end of its payout range of 55-65% of second half underlying NPAT. At its half year results, SUL announced an interim dividend but cancelled it due to Covid-19 uncertainty.

Why did it happen?

  • Covid-19 had a big impact on the group’s total sales from March onwards. Group LFL sales fell 26% in April but surged 27% in May and June on pent-up demand for outdoor, travel and leisure activities. Online sales also received a solid boost from the change in spending behaviour by consumers due to the pandemic with online sales up 44% to $290.5 million over FY20.
  • Much of the lift in overall sales for SUL can be attributed to growth for its largest segments, Supercheap Auto and Rebel. The two brand segments represent ~76% of total sales and 90% of total EBIT for the group.  Full year sales for Supercheap rose 7.6% to $1.12 billion while like-for-like sales increased 6.3%. Rebel saw sales hit $1.04 billion, an increase of 3.3% with strong demand for home fitness products. Margins for Rebel increased on lower promotional activity, with the June annual clearance pushed back to July. All other segments saw margins decline on competitive pressures. Rebel’s Click & Collect sales more than doubled in Q4.
  • Outdoor/camping groups, BCF and Macpac, saw mixed results. BCF enjoyed sales growth of 4% to $535 million with LFL sales up 3%. Macpac sales fell 5% to $131.9 million while LFL sales fell a much sharper 9.1%. Sales were lower in both Australia and NZ with the 7-week mandatory shutdown across all NZ stores hampering sales. While Macpac financial performance was the weakest, it saw the biggest growth in online sales across all segments with a jump of 83% to $22 million.

Where to now?

  • Sales have been positive across all segments for the first seven weeks of FY21. LFL sales growth has been in the double digits with Macpac the slowest, lifting 16% and BCF with the largest increase of 72%. Supercheap growth is at 23% while Rebel is at 30%. Group LFL sales is 32% higher year on year for the period.
  • SUL did not provide any firm sales guidance for the year ahead stating that “Current consumer spending patterns remain volatile and economic outlook is uncertain.”

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SUL

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