Homewares retailer Adairs has posted group sales for the first half of 2022 of $242 million, according to its most recent trading update.
This includes a $12.5 million contribution from Focus on Furniture for its 26 days of ownership including $1.6 million from online.
Earnings before income and taxes (EBIT) is expected to fall between $32 and $33 million, way down from $60.2 million in the first half of FY21, but still better than the $22.6 million in the first half of FY20.
The retailer’s sales have been significantly impacted by the store closures due to the Covid pandemic, reducing the overall number of store trading days by 31 per cent.
Lower levels of rent rebates, higher wages and warehouse disruptions due to the slowdown of the transition to a single national distribution centre all influenced the sales result as well.
Stock flow into Australia and New Zealand from Asia remains inconsistent due to factory and shipping capacity disruptions across the region. Even though inventory was well managed, there were significant disruptions to Adairs’ domestic supply chain.
“During the half, despite significant operational disruptions, we have made strides in progressing our strategic priorities by commissioning our new national distribution centre, upsizing selected stores, continuing to expand our range and adding to our omnichannel capabilities,” explains CEO and managing director, Mark Ronan.
Despite the store closures, Focus has done well in the first half according to Adairs, while the acquisition of Mocka was completed as well.
“We also built our portfolio of vertical omnichannel retail brands by bringing forward the finalisation of the Mocka acquisition and completing the acquisition of Focus on Furniture. The progress we’ve made against these priorities gives us confidence in the growth prospects of the group.”
The group finished 1H FY22 with net debt of $90.9 million including $120 million in drawn debt and $29.1 million of cash on hand, following the acquisition of Focus (cash outflow of $61.5 million) and the final payment to the Mocka founders ($45.7 million) in the half.
