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Date : 14/02/2022

JB Hi-Fi Limited (ASX: JBH) is gaining after announcing half-year results and stock repurchase of $250 million

JB Hi-Fi Limited (ASX: JBH) is a Melbourne-based consumer goods manufacturing company, and its headquarters is located in Southbank. The company is publicly listed on ASX under the ticker symbol JBH. They have 300 stores located at different locations in Australia and New Zealand. The Good Guys, Clive Anthonys Pty Ltd, and Network Neighborhood Pty. Limited is amongst subsidiaries.

JB Hi-Fi Limited is significantly known for The Good Guys and JB Hi-Fi retail outlets. They have an extended range of product lines that include consumer appliances and electronics, home entertainment, white goods, etc. Their business is massively diversified and covers the services sector with its JB Hi-Fi business that provides information technology and consulting services, insurance, education, and commercial sectors.

The stock price of the JB Hi-Fi Limited (ASX: JBH) surged in the regular trading session after the company announced its half-year results this morning. JBH was severely affected by the Covid-19 pandemic, but its online sales increased on the contrary, which gave it stability to have stable revenue growth.

JBH was stable in the last six months

The Covid-19 pandemic had immensely affected JBH. But since the past six months, the stock of JBH had been stable. 6 months ago, the stock was priced at around A$49.53, and at the time of this writing, JBH is priced at A$51.50.

  1. The revenue of the company saw a decline of around 1.6%. The first half ended on December 31, 2021, and accumulated revenue is $4.86 billion.
  2. Net income of the first half was approximately $287.9 million, attributable to the company’s owners.
  3. The company announced $250 million worth of share buyback.
  4. The basic earnings per share and diluted EPS of the company’s first half of the fiscal year are 250.6 cents and 249.6 cents per share.
  5. JBHH values at A$51.50 in the current market and gained more than 5% compared to yesterday’s closing price of A$49.05.
  6. The current market cap of JB Hi-Fi Limited (ASX: JBH) is approximately 5.94 billion AUD.

Update on the Dividend

The company’s board of directors has suggested paying an interim dividend of A$1.63 per common stock share for the half-year ended December 31, 2021. The interim dividend is payable on March 11, 2022. The 30% corporate income tax rate applies to all dividends declared and paid by the company.

Covid-19 effect on the business and Government subsidies

The new variants arising had severely affected the business during the half-year ended on December 31. The lockdowns caused by the Delta and Omicron variants caused a supply chain disruption. Due to this, the company’s retail business massively got a massive blow.

But despite the downfall of its retail business, the online business of JB Hi-Fi Limited (ASX: JBH) surged during the period. Its online sales gained by more than 62% to A$1.1 billion.

JB Hi-Fi Limited (ASX: JBH) did not receive any Covid-19 Subsidies from the Government of Australia. On the contrary, New Zealand granted A$0.5 million worth of subsidies to the group.

2022 Outlook

JB Hi-Fi Limited (ASX: JBH) saw year-on-year growth in all of its primary operations in January. While COVID-19 disrupted the supply chain and operations, rising demand drove the price down.

Revenue at JB Hi-Fi Australia increased by 4.3%, while those at The Good Guys increased by 2.5% during the month. JB Hi-Fi New Zealand’s revenues were down 1.5% in January compared to last year’s same month.

JB Hi-Fi Limited (ASX: JBH) has also announced a stock repurchase program of A$250 million, fulfilling its vision of returning the value to its shareholders.

What do we suggest?

Despite the ongoing supply chain disruption, the company has provided a great half-year financial statement. Its online sales have grown by more than 64%, making us optimistic about the company to deliver outstanding results as soon as the situation eases.

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