Briscoe Group leans into ‘next generation’ property as profit falls

13th March 2025 By Bridget O'Connell | bridget@propertyticker.co.nz | @propertyticker

Briscoe Group is hoping a new $120m warehouse and distribution centre, as well as flagship stores, will help revitalise its performance after reporting a fall in full year profit and flat revenue.

The retailer reported on Wednesday underlying net profit after tax of $68.01m for the year to 26 January 2025, down 19.3% on the previous 12 months. Revenue was flat at $791.47m and the company declared a full year dividend of 22.5 cents per share, down from the prior year’s 28.5 cents per share.

At the end of the period, the net book value of Briscoes Group’s freehold properties was $125.4m, up from an opening value of $96.37m at the start of the year.

It also continued to lease a substantial number of its retail and operational properties, reflected in total lease liabilities of $276.7m.

The NZX-listed company, which has 47 Briscoes Homeware and 43 Rebel Sport stores, said most of its capital expenditure during the period was on its new 20,000 square metre distribution centre project at Drury, South Auckland.

“During the year $58.2m of capital investment was made by the group of which $40m represents expenditure in relation to the new distribution centre project at South Auckland, including purchase of land and preliminary payments in relation to building construction and automation contracts,” Briscoe Group said.

“The roll-out of electronic labelling throughout the group network accounted for around a further $10m million of capex with the balance of capital investment being for store refurbishments, store essential expenditure and enhancements to system software and hardware.”

The retailer also completed a number of store development projects during the year, including refurbishments at both Rebel Sport and Briscoes Homeware stores in Invercargill, and an upgrade of the Briscoes Homeware store at Hornby, Christchurch.

“We are also very excited about the progress made during the year in relation to the design of new flagship stores for both Briscoes Homeware and Rebel Sport,” said Briscoe Group managing director Rod Duke.

“We are thrilled with the work done and the potential to be unlocked by these ‘next generation’ stores which we hope to deliver by the end of this financial year. We believe these new formats will revitalise the look and consolidate the relevancy of our value proposition.”

On the South Auckland distribution centre, which is expected to cost about $120m to develop, Duke said “significant progress” has been made.

“A key milestone was the implementation during the first half of the year of a new warehouse management system – Manhattan. This has enabled the team to upskill before transitioning to the new facility when it becomes operational towards the end of 2026.”

Earthworks were underway, and the shell of the new complex should begin to take shape around mid-2025.

“At a time when other companies may very well be looking to refrain or defer significant strategic expenditure, we remain committed to investing in the group’s future through a number of both current and new initiatives,” Duke said.

“[These include] the new distribution centre which, when operational, will transform our ability to control the flow of inventory right across our network; the new online platforms which will step-change the way we manage and present our online offering; the launch of new flagship stores; and our new merchandise planning tool which will provide us a level of analysis and ordering capability that we have not had before.”

Looking ahead, Duke said the first half of the current fiscal year would be “especially challenging”.

“We expect this will see second half profitability exceed that produced for the first half in a return to a more noramlised shape of profitability.

“Looking further out we are excited about the benefits and profit growth potential from the initiatives already mentioned which we believe will drive growth across the next three to four years.”