As tipped by ChannelNews, Clive Peeters has reported a 60 per cent fall in profits as competitors such as Harvey Norman, JB Hi-Fi and Dick Smith report record profits and revenue.Reporting to the ASX earlier today, Clive Peeters, which recently launched an online operation, said that sales had fallen 5.3 per cent and the company made a net profit after tax of only $0.4 million during the six months to December 2009. This is 60 per cent below the $2M they made in the same period prior.
Still blaming a failure of its corporate auditing system which saw former Payroll Manager Sonia Causer walk out the door with nearly $20 million in cash, Clive Peeters managing director Greg Smith and the company’s largest shareholder is eternally optimistic that “things will get better” for the struggling appliance and consumer electronics retailer. Causer is currently facing charges in the Victorian Magistrates Court.
Alarming for the company is the fact that comparable store sales for the group declined 6.5 per cent and gross profit margin declined 22.6 per cent.
In comparison, Harvey Norman on Friday reported a 60 per cent jump in profits, while JB Hi Fi achieved a 29 per cent jump in profits during the same reporting period.
The Australian newspaper reported that, as management highlighted this morning, the “misappropriation event” had profound wider repercussions, including reduced foot traffic because of negative publicity. Not too many retailers would be happy to describe a subsequent 6.5 per cent sales slump as “very creditable”, but such was the extent of the rot that management had to be happy with that.
As a result of that distraction, management couldn’t open any new stores during the half. The incident also strained cash flows, diminished supplier rebates and interrupted trading stock.