Growth continues for Officeworks

Australian office products retailer Officeworks has reported top-line growth of 7.6% for its financial year that ended on 30 June.
Revenue for the year was A$2.31 billion (US$1.56 billion), up from A$2.14 million in the previous 12 months. This was a reported increase of 8%, but represented a 7.6% sales increase. The company pointed to “strong sales growth” from both its stores and online operations, plus “strong momentum” in the B2B segment.
EBITDA for the year was A$195 million, a 7.7% year-on-year increase, while EBIT grew 7.1% to A$167 million. EBIT margin fell by 10 basis points to 7.2%.
Officeworks said the improvements in sales and earnings were underpinned by new and expanded product ranges, online enhancements, improvements to the click-and collect-offer and continued focus on the customer experience.
Product-range expansion included the educational, commercial furniture and commercial technology categories, while click-and-collect orders grew by 45% during the year, CEO Sarah Hunter confirmed during the earnings conference call.
Officeworks ended the period with 167 stores, a net increase of two, including the new large store format outlet near Melbourne that opened earlier this year.
Key focus areas for the 2020 financial year include the opening of a major new distribution centre in Western Australia, developing the Geeks2U customer proposition following the acquisition of the tech services provider in March, and implementing a new enterprise agreement for store employees.
The enterprise agreement – which still needs to be ratified by the Australian Fair Work Commission – will lead to higher staff wages that, along with continued price investments, will put pressure on Officeworks’ profitability. Hunter said that productivity improvements would “partially offset” the impact of these initiatives.


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