Adairs Limited releases first half FY24 results

Adairs Limited (ASX: $ADH) has released its results for the 27 weeks to 31 December 2023 FY24. The company reported a 10.1% decrease in group sales, with improved gross margin rate and reduced cost of doing business (CODB) despite inflationary pressures. The underlying Group EBIT was $28.6 million, down 19.3% on a comparable 26-week basis. The statutory NPAT was $17.7 million with a group net debt of $58.6 million, $15.4 million lower than June 2023. Adairs also declared an interim dividend of 5.0 cents per share (fully franked) and the Dividend Reinvestment Plan (DRP) remains active.

Managing Director and CEO, Mark Ronan, comments on first half FY24 results

The first half of FY24 has been challenging given customers continue to manage their household budgets carefully, leading to lower customer traffic. It is pleasing that we have been able to deliver on our primary objectives whilst focusing on those factors within our control - making sure we continue to offer great product at an attractive price with an outstanding customer experience across all of our businesses. Each business has key priorities that will over time deliver growth in sales while ensuring our cost base is managed appropriately for the prevailing and anticipated trading environment.

Summary of first half FY24 results and outlook

Adairs Limited reported a challenging first half of FY24 with a 10.1% decrease in group sales, but managed to achieve improved gross margins and cost management initiatives. The company's focus on reducing CODB, taking operational control of the Adairs NDC, and turning around the Mocka business contributed to the resilience of the results. Adairs also reduced net debt, resumed the payment of dividends, and remains confident in the key near-term initiatives across the Group for profitable growth. The Board declared an interim fully franked dividend of 5.0 cents per share and expects the trading environment to remain subdued, but is confident in the levers for profitable growth provided by the key initiatives. The Group's comparative sales performance is expected to improve across the second half of FY24, and the Dividend Reinvestment Plan (DRP) will remain active for the FY24 interim dividend.