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1H22 Results

Presentation

17 February 2022

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About The Reject Shop

The Reject Shop has been delivering value to shoppers for over 40 years. The Reject Shop helps all Australians save money everyday by offering products frequently used and

replenished such as food, snacks, greeting cards, party,

health and beauty, cleaning supplies, storage, kitchenware, homewares, pet care and seasonal products at low prices in 367* convenient store locations across Australia.

* As at 26 December 2021

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Results Overview

  • NPAT (post AASB 16) of $15.4 million, down 9.9% on the prior corresponding period (pcp)
  • NPAT (pre AASB 16)1,2 of $14.3 million, down 12.1% on pcp
  • EBIT (post AASB 16) of $24.9 million, down 10.2% on pcp
  • EBIT (pre AASB 16)1,2 of $20.5 million, down 12.2% on pcp
  • CODB (pre AASB 16)1,2 up 0.2% on pcp
  • Sales of $424.7 million, down 2.2% on pcp
    • Comparable store sales were down 4.0% on pcp
  • Strong balance sheet with cash of $106.4 million and no drawn debt
    (net cash position of $73.0 million at Jun-21 and $107.6 million at Dec-20)
  • No interim dividend has been declared in 1H22
  1. Pre AASB 16 results have not been reviewed by the Company's auditors.
  2. Pre AASB 16 occupancy costs in EBIT, CODB and NPAT have been estimated using cash occupancy costs. Refer to Appendix for a reconciliation of 1H22 Statutory and Pre AASB 16 results

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Financial Overview

Statutory1

Pre AASB161,2

Variance

Variance

$m

1H22

1H21

F/(U)

1H22

1H21

F/(U)

Sales

424.7

434.3

(2.2)%

424.7

434.3

(2.2)%

Comp. Sales

(4.0)%

(0.0)%

(4.0)%

(0.0)%

Gross Profit

182.6

186.6

(2.1)%

178.8

182.8

(2.2)%

CODB

(103.6)

(102.8)

(0.8)%

(152.1)

(151.7)

(0.2)%

EBITDA

79.0

83.7

(5.7)%

26.7

31.1

(14.1)%

Depreciation

(54.1)

(56.0)

3.4%

(6.2)

(7.7)

19.8%

EBIT

24.9

27.7

(10.2)%

20.5

23.3

(12.2)%

Interest

(2.9)

(3.3)

11.5%

(0.0)

(0.0)

40.4%

Profit Before Tax

21.9

24.4

(10.0)%

20.5

23.3

(12.1)%

Tax

(6.6)

(7.3)

10.2%

(6.1)

(7.0)

12.3%

Net Profit After Tax

15.4

17.0

(9.9)%

14.3

16.3

(12.1)%

(1) Comp. Sales, Gross Profit, EBITDA, EBIT and Interest are non-IFRS measures and have not been reviewed by the Company's auditors.

(2) Pre AASB 16 results have not been reviewed by the Company's auditors. Pre AASB 16 occupancy costs (included in CODB) have been estimated using cash occupancy costs. Refer to Appendix for a reconciliation of Statutory and Pre AASB 16 results.

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Operating Results

Sales

  • Comparable store sales were down 4.0% on the pcp
  • Government imposed COVID-19 lockdowns, restrictions and border closures had a mixed impact on sales
  • COVID-19Omicron variant adversely impacted store foot traffic in the lead up to the key Christmas trading period - December comparable store sales were down approximately $5.8 million on the pcp
  • Large shopping centre and CBD stores were most negatively impacted, with comparable store sales down 5.1% on the pcp and down 14.2% over two years (pre COVID-19)
  • Metro and country stores in neighbourhood and strip locations were more resilient, with comparable store sales down 3.1% on the pcp and up 1.0% over two years (pre COVID-19)
  • 367 stores at 26 December 2021 with 11 new store openings and five closures during the half

Gross Profit (Pre AASB 16)

  • Gross margin was flat on pcp at 42.1%
  • Increased retail prices on selected products to offset higher raw material prices and rising international shipping costs
  • International shipping costs incurred during the period were approximately 5x higher than pre COVID-19 levels

1H22

1H21

Variance

$m

(Pre AASB 16)1

(Pre AASB 16)

F/(U)

Sales

424.7

434.3

(2.2)%

Comp. Sales

(4.0)%

(0.0)%

Gross Profit

178.8

182.8

(2.2)%

% sales

42.1%

42.1%

0.0%

Store Expenses

(131.4)

(132.5)

0.8%

% sales

(30.9)%

(30.5)%

(0.4)%

Admin Expenses

(20.7)

(19.3)

(7.2)%

% sales

(4.9)%

(4.4)%

(0.4)%

EBITDA

26.7

31.1

(14.1)%

% sales

6.3%

7.2%

(0.9)%

D&A

(6.2)

(7.7)

19.8%

EBIT

20.5

23.3

(12.2)%

% sales

4.8%

5.4%

(0.5)%

  1. Pre AASB 16 results have not been reviewed by the Company's auditors. Pre AASB 16 occupancy costs
    (included in Store Expenses) have been estimated using cash occupancy costs. Refer to Appendix for a reconciliation of Statutory and Pre AASB 16 results.

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Disclaimer

The Reject Shop Limited published this content on 16 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 February 2022 21:20:01 UTC.