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Bullish Briscoe Group to repay Covid-19 wage subsidy

Booming sales of homewares have prompted Briscoe Group to repay the $11.5 million wage subsidy it received from the government in the wake of the Covid-19 crisis. 

The company said in a statement on Friday that it experienced “continued strong sales during the third quarter” and was cautiously optimistic about its prospects for the remainder of the year.

Briscoe Group owns the Briscoes Homeware, Living & Giving and Rebel Sport retail chains.

In March, Briscoe Group cancelled a $28 million dividend scheduled for shareholders, and continued to pay all frontline employees 100 per cent of their normal pay throughout the lockdowns. 

“Management has confirmed that the sales momentum we saw leading into our half year results has continued into the third quarter,” said chair Dame Roseanne Meo. “Whilst we were unquestionably eligible for the first round of wage subsidy, our recent trading performance has given the board confidence to repay the subsidy in full.”

The retailer has closed no stores permanently since the outbreak of the pandemic, and made no staff redundant.

“It is a credit to the team led by Rod Duke that we have come through this once-in-a-generation crisis so strongly,” said Dame Roseanne. “The energy and success of the team in continuing with new developments and initiatives during this extraordinary period has far exceeded the board’s expectations.”

First-quarter sales for Briscoe Group were down 35.6 per cent in wake of government stay-home orders and the closure of stores and online sales during the most drastic lockdown level. But she described the rebound over the next two quarters as “equally as remarkable” leading to a half-year result broadly in line with the same period a year earlier.  

Third-quarter sales to October 25 will be released about November 3. 

Dame Roseanne said given the strong performance the board believed “it is the right decision for our company to pay back the $11.5 million”.

Retaining the dividend scheduled for March helped the company’s cash flow during the lockdown and the improved fortunes thereafter allowed the company to announce a $20 million half-year dividend instead. 

The company is still treading carefully as it heads towards the final quarter. 

“We are certainly not out of the woods but we are in good shape. Other companies have leveraged their balance sheets and, in some cases, have had to go to shareholders for more funds. We have not had to do this.

“We pride ourselves with having a strong balance sheet so we can continue to expand our economic footprint with new store openings which will inevitably lead to the creation of jobs. In that regard the company is playing its part in helping rebuild New Zealand,” said Dame Roseanne.

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