Retailer on a roll despite ‘uncertain’ future.

 

Officeworks has reported a 20.4 per cent increase in full year revenue of $2.8 billion on the back of its best-ever back-to-school trading period and a surge in home office sales.

 

Earnings at the Wesfarmers subsidiary increased 13.8 per cent to $190 million in the 12 months to 30 June. 

 

“We have delivered strong growth and positive progress against our strategic agenda over the past 12 months,” Sarah Hunter, managing director of Officeworks (pictured), said.

 

“We were able to play a unique role providing essential products and services to Australians as they adjusted to new ways of working, learning and running their businesses,” she said. “During the year, investment was made in Officeworks’ every-channel offer, including upgrades to online functionality and features, and the renewal of 72 stores.” 

 

Officeworks’ expanded Townsville outlet if now the second-largest in the retailer’s 167 store network.

 

The company said earnings growth of 13.8 per cent was delivered, despite gross margin compression from a significant change in the sales mix towards lower-margin technology products and on-going investment in price throughout the year. 

 

Earnings growth, combined with working capital benefits from strong customer demand, resulted in an increase in return on capital to 19.6 per cent.

 

Hunter said the retailer’s outlook for the 2021 financial year is “uncertain”, with changing customer shopping patterns and COVID-19 measures expected to impact trading conditions. 

 

She added that key focus areas for the company in the 2021 financial year include investment in team member safety, health and well-being programs, leveraging the customer data and analytics platform to improve personalisation, building Officeworks’ position in education, increasing awareness of its Geeks2U offer and investment in customer fulfilment centres and the store network to capture sales growth and accelerate productivity initiatives.