Sales up but revenue down in first half.

 

The long-running pandemic has hit Officeworks’ bottom line with the retailing reporting an 18 per cent decline in earnings to $82 million in the first half. 

 

The decline was attributed to higher costs and disruptions associated with COVID-19 and on-going investment to support long-term growth, including accelerating its investment in data and digital capabilities. 

 

The company reported $1.58 billion in total revenue for the first half, an increase of 3.7 per cent from the previous period and two-year sales growth of 28 per cent. 

 

Online sales, including ‘click and collect’, increased to 46 per cent for the half, also reflecting the temporary shift to online channels during COVID related restrictions. 

 

Government-mandated temporary store closures reduced store trading days by 18 per cent and affected in-store office supplies and ‘print and create’ categories.

 

Costs increased as a result of additional supply chain and fulfillment costs due to the significant increase in online sales, as well as disruptions to international shipping, global supply shortages and increased transportation costs. 

 

Additional costs were also incurred to ensure the provision of a COVID-safe working and shopping environment for our team members and customers.

 

Investment in data, digital and ecommerce capabilities accelerated and included the recruitment of additional digital roles and the launch of a partnership with Flybuys. 

 

Return on capital declined to 19.6 per cent for the half as a result of the decline in earnings. 

 

Sarah Hunter, managing director of Officeworks (pictured) said: “While the impacts of COVID-19 remain challenging, Officeworks is well-positioned to deliver long-term returns by delivering our strategy, including continuing to invest in the every-channel customer experience, leveraging our data and digital capabilities and modernising our supply chain in order to meet the evolving needs of customers.” 

 

Officeworks completed the renewal of 31 stores, relocated three stores to new locations, made the transition to a new customer fulfillment centre in Victoria and commenced the roll-out of its refreshed brand. 

 

Officeworks had a total of 167 stores across Australia as at 31 December 2021.