Godfreys profit slides almost 20pc in financial year results

Godfreys has reported a 2.9 per cent decline in revenue to $174.1 million and a 19.8 per cent dive in EBITDA to $14.1 million for the 2017 financial year, as the retailer continues to convert its network to a majority franchise model.

Godfreys managing director John Hardy, said the company’s FY2017 results reflect the disciplined approach management and the board have taken to get the basics right to position the business for future growth.

“In 2017, we introduced a number of new products, including a range of stick vacs and an expanded range of commercial products, refreshed our retail staff training program and incentive structures, enhanced the efficiency and effectiveness of our advertising and introduced ‘click and collect’ and ‘from warehouse to your house’ features to support online and in store sales.

“Strong demand saw 22 stores converted to franchises in FY17, for a total of 100 franchise stores out of a total network of 222 stores. The conversion generated franchise fees of $5.3m and improved sales performance from the converted stores,” Hardy said.

Hardy said it was pleasing to see the comparable sales performance of like-for-like stores stabilise during the second half of the financial year, with improvement in the June quarter.

“Improving performance across the retail network and wholesale business is expected to flow though to improved results. We expect the contribution from initial franchise fees to reduce in FY2018, and will be weighted to the second half of the financial year. As a result, underlying EBITDA is expected to be at similar levels to FY2017 but with a change in mix.”

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