The chief of Godreys has labelled the vacuum retailer’s half-year results as “disappointing”, but insists the company is making inroads rationalising its product range and converting its network to a majority franchise model.
Godfreys Group Limited reported an underlying net profit after tax of $2.3 million for the half-year ended December 30, compared to $4.5 million for the previous corresponding period.
Sales for the period were $92.4 million, an increase of 2.8 per cent on the prior year, which included the contribution from The Service Company.
Comparable store sales for the half were down by 7 per cent, while operating gross margins were down by 3.5 percentage points
John Hardy, Godfreys CEO, said the company’s initial priorities have been to address product range and improve store presentation and staff training.
“While the financial performance for the half was disappointing, I am pleased by the progress we have made in improving fundamental areas of the business; these changes have set the foundation to restore Godfrey’s financial performance to acceptable levels,” Hardy said.
“Our initial priorities have been to address gaps in our product range; realign our marketing strategy; improve store presentation; and enhance the training of our sales teams. During the half we made solid progress in these areas, particularly in terms of realigning the product range and we now expect to have this largely in place by May.”
Godfreys opened four stores and closed three during the period, taking its total network across Australia and New Zealand to 223 stores.
The vacuum retailer said its strategy to move to a majority franchised model is “on track to deliver 18 store conversions to franchise stores for the 2017 financial year”.
Four stores were completed at the end of December 2016, with 14 slated for the second half of 2017.
Godfreys plans to covert 60 corporate-run stores to a franchise model over the next three years.
The retail project is being led by Bernie Bicknell following the appointment of Andrew Ford as CFO.
“The franchise strategy announced in October last year in progressing well and has been well received by potential franchisees generating a solid pipeline,” Hardy said.