Work from home boosts Australian high-tech retailers to record profit

SYDNEY Two of Australia’s biggest tech-focused retailers posted record annual profits and raised dividends on Monday as a coronavirus-driven shift to working from home prompted a frenzy of purchases of computers, screens and other home goods.

The results from No. 1 electronics retailer JB Hi-Fi Ltd and Amazon.com Inc peer Kogan.com Ltd reflect major changes in global spending patterns. While many traditional retailers have turned to bankruptcy or government aid, those catering to people working from home, and staying in for entertainment, are raking in more discretionary spending.

JB Hi-Fi said underlying profit jumped by a third to A$332.7 million ($239 million) in the year to end-June, rocketing past a pre-pandemic forecast of A$265 million-A$270 million. It raised its final dividend by three-quarters.

Kogan hadn’t issued a forecast but its net profit for the period leapt 56%, and the payout to shareholders hoisted by two-thirds.

“Customers are changing their spending priorities, certainly from working and learning from home … but also we have available cash to spend because we’re not spending it on travel,” said JB Hi-Fi CEO Richard Murray.

Australia has eased a nationwide shutdown but the country still has its national and many state borders closed due to concerns of fresh virus outbreaks. The state of Victoria, home to a quarter of the country’s 25 million population, faces strict new curbs on movement due to a second wave of the virus.

Shares of JB Hi-Fi touched a record intraday high to be up 5.3% by mid-session, while the broader market was down 0.6%. Kogan shares dipped 5% as investors cashed in profits from a record high reached the previous session.

“The work-from-home theme has been huge … but the question then comes: is this just pulling forward a whole lot of sales that otherwise would have happened?” said Ned Bell, chief investment officer at Bell Asset Management.

“What happens from next year onwards?”

($1 = 1.3918 Australian dollars)

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