Tuesday 29 November 2016 01:08 PM
Building boom powers Bunnings NZ bumper annual profit
By Fiona Rotherham
Nov. 29 (BusinessDesk) - Bunnings, the home improvements product chain owned by Australian Wesfarmers, has more than
doubled annual net profit in New Zealand for the second year in a row as it benefits from a construction boom
stimulating demand for building, hardware and garden supplies.
Net profit after tax for the year ending June 30 was $27.2 million, compared to $12 million the year prior. Revenue
lifted to just over $1 billion from $898 million in 2015.
Related party loans increased to $305,000 from $313,000 the prior year, and that figure includes a royalty and expense
reimbursement charge of $14.9 million to its Australian parent, compared to just $140,000 the prior year.
Bunnings’ profit bump matches similar improved results from its main Kiwi rivals this year.
Mitre 10 paid shareholders $5.8 million in dividends, its biggest in at least 17 years, as profit soared to $3.2 million
in the June 30 year from just $106,000 in 2015. Growing consumer demand lifted network sales 9 percent to $1.24 billion.
Fletcher Building doesn’t break down its numbers for the Placemakers hardware and building products franchise, though it
said revenue was up 10 percent in the June 30 year. The distribution division Placemakers sits within reported revenue
of $3.1 billion, up 3 percent on the prior year while earnings before interest, depreciation, and amortisation rose 14
per cent to $180 million.
Bunnings has been expanding its footprint in New Zealand and Australia and its website lists 62 stores in this country,
mostly in the North Island.
Last month Wesfarmers released sales results for the first quarter of the 2017 financial year, showing Bunnings
Australia and New Zealand extended their strong performance with sales growth of 7.4 percent to A$2.7 billion. Although
the conglomerate doesn’t break down the quarterly figures for Bunnings NZ, it noted “pleasing growth experienced in New
Zealand”.
Bunnings made its first foray outside of Australia and New Zealand this year after Wesfarmers acquired UK-based DIY
chain Homebase. Home improvement division boss John Gillam said good progress was being made to reshape the Homebase
business with sales of 320 million pounds for the quarter, in line with expectations.
The first Bunnings Warehouse pilot store is due to open at an existing Homebase site in the UK in mid-February and at
least another three Bunnings UK pilot stores are expected to open before the end of June 2017.
(BusinessDesk)