Premier Investments, owner of retail chains including Peter Alexander and Just Jeans, has defended not repaying $15.6 million in JobKeeper assistance after reporting an 88 per cent profit increase.
Chairman Solomon Lew and chief executive Mark McInnes during a media call on Wednesday said Premier had used the subsidy to pay workers during coronavirus closures and would continue doing so in the event of more lockdowns.
Mr McInnes said it was impossible to predict what would happen during a global health crisis.
“The danger going forward is if there are snap lockdowns in future, who is going to pay those people,” he asked.
“We’ve made the commitment to do that.”
Premier, which owns seven retail chains, collected the JobKeeper benefit and made a $188 million net profit in the 27 weeks to the end of January.
The company said the benefit would not be used to pay shareholder dividends or management bonuses.
Mr McInnes said before JobKeeper was introduced last year, the company lost $131 million in sales from coronavirus closures between March and May.
The company was ineligible for the second phase of the wage subsidy from September 28 last year.
Premier’s decision not to repay the funds is in contrast to others, such as Super Retail Group, which is return $1.7 million in JobKeeper support to the federal government.
Among the details of Premier’s first-half figures, underlying earnings before interest and tax rose by a similar amount to $238 million. This bettered the top of Premier’s guidance range by $5 million.
“To have delivered these record results in a very difficult and volatile environment is a truly outstanding achievement,” Mr Lew said.
During the first half, many of the group’s retail stores were shut or restricted due to government health orders imposed to limit the spread of COVID-19.
But Mr McInnes said the company had taken a punt on increasing its inventory ahead of the key summer Black Friday, Christmas and January sales.
“This decision ensured we were in-stock to deliver significantly higher sales and gross margin,” he said in a statement.
“Those same inventory investments and in-stock strategies have continued” into the second half of 2020/21, with sales already tracking 32 per cent higher in the first seven weeks.
Premier’s online sales also exploded during the half-year by 61 per cent, making up 20 per cent of all sales.
Its best performing brand was Peter Alexander, which sells sleep and home wear for adults and children, which delivered record sales of $208 million.
Premier will pay an interim dividend of 34 cents, in line with the previous corresponding period.
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