JB Hi-Fi and iiNet forecast big profit increases

The country’s third-largest internet service provider, iiNet, and electronics retailer JB Hi-Fi both announced higher profit forecasts for the current financial year despite the deteriorating economy. JB Hi-Fi announced expectations of profit growth of 41% to $92 million, up from last year’s $65.1 million.

Chief executive Richard Uechtritz says that while the overall economic environment is poor, the results show that a 26% jump in sales to $2.3 billion is negating any negative economic effects.

“We’ve got a very strong model that Australians find very attractive. I think Australians still spend on home entertainment and perhaps not other things, so we’re sitting in the right place at the right time.”

Uechtritz also says that retailers can only do so much to help attract sales in a downturn and that the “standard retail principles” still apply.

“Regardless of whether you’re in good times or bad times, the good principles of retailing don’t change, so we’re still out there watching our costs and making sure we’ve got the right product and the right people. All those things are standard retail principles.”

Meanwhile, iiNet managing director Michael Malone said in a statement that it expects “strong growth” for the year with profit reaching $25 million, up from last year’s $23.3 million.

Malone said that iiNet’s profit will jump to $25 million from last year’s $23.3 million, with revenue forecast to reach $415 million.

“The anticipated results demonstrate that we are delivering on our strategy and the synergy commitment we made following the acquisition of Westnet in May 2008.”

Malone also said that the company has been granted an extension on its debt facility by Westpac for another three years, and that it has “very low debt” levels of $24 million.