JB Hi-Fi Declares Special Dividend Following E&S Trading Acquisition

Highlights:

• Strategic Acquisition: JB Hi-Fi Limited acquires 75% of E&S Trading Co. for AU$47.8 million, expanding its product offerings in the premium kitchen, laundry, and bathroom segments.
• Special Dividend Declared: The company announces a special fully franked dividend of 80¢ per share, alongside a final dividend of AU$1.03 per share, with a total payout of AU$200 million to shareholders on September 6, 2024.
• Mixed Financial Performance: Despite a 0.4% decline in group sales to AU$9.59 billion and a 16.4% drop in net profit to AU$438.8 million, JB Hi-Fi’s results exceeded market expectations.

Strategic Acquisition of E&S Trading Co.

JB Hi-Fi Limited (ASX: JBH), a leading electronics and home goods retailer, has announced the acquisition of E&S Trading Co., a kitchen, laundry, and bathroom products business. The company will pay AU$47.8 million in cash for a 75% stake, with an option to acquire the remaining shares in September 2029. JB Hi-Fi's CEO, Terry Smart, stated that the acquisition aligns with the company’s strategy, as E&S offers premium products and focuses on the commercial construction market, expanding JB Hi-Fi's customer base.

Special Dividend and Financial Performance

In addition to the acquisition news, JB Hi-Fi declared a special fully franked dividend of 80¢ per share for investors. This dividend comes alongside the company's final dividend of AU$1.03 per share, which is down by 12¢ from last year, reflecting lower profits. The combined payout of AU$200 million will be distributed to shareholders on September 6, 2024.

Mixed Financial Results

For the fiscal year ending June 30, 2024, JB Hi-Fi reported a slight decline in group sales, down 0.4% to AU$9.59 billion. Despite this, the results exceeded analysts' expectations. Earnings before interest and tax (EBIT) fell to AU$647.2 million, but this was better than the anticipated 18.5% drop to AU$626.6 million. Net profit also declined by 16.4% to AU$438.8 million.

Strategic Outlook

The acquisition of E&S Trading Co. and the special dividend demonstrate JB Hi-Fi's commitment to strategic growth and shareholder value. The move is expected to strengthen the company’s market position and expand its product offerings, targeting a broader range of customers in the premium segment. As JB Hi-Fi continues to navigate market challenges, these initiatives reflect its focus on long-term growth and profitability.

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