By Patrick Avenell

David Jones has today posted a record profit report in its annual report to the Australian Securities Exchange. With sales revenue in excess of $2 billion, David Jones’ profit after tax for FY07 was up 25.1 per cent to $137 million.

“Despite being a very challenging retail environment, in particular 2H08, we are pleased to report that our company has delivered a record profit result and declared a record dividend — both being the highest since listing in 1995,” said David Jones chief executive officer, Mark McInnes.

David Jones sales revenue for the year was up 5.8 per cent from last year, totaling just under $2.1 billion. Earnings before interest and tax (EBIT) was up an impressive 21 percent, from $176 million to $212.9 million. This has resulted in a full year dividend of 27 cents per share, up 22.7 per cent on last year.

In the wake of this positive report, David Jones has reaffirmed its profit guidance for FY09, predicting five to 10 per cent profit after tax growth for the new financial year.

Considering the comparatively disappointing years retailers like Harvey Norman and Clive Peeters have experienced, this is very good news for David Jones shareholders and encouraging news for the retail sector in general.

McInnes attributes David Jones’ success over this period to the company’s long-term strategy, which has been in place now for some years. The continuation of this strategy is his current objective, as he looks to deliver on the reaffirmed profit guidance for the next financial year.

“In 2003, we focused on restoring investor confidence by concentrating on improving the performance of our core business and delivering sold PAT and dividend growth,” said McInnes.

“As we enter the next stage of our company’s development (namely the FY09 – FY12 strategic plan), not only do we have the benefit of a proven business model, a strong track record of delivering PAT and dividend growth throughout the economic cycle and a capable and experienced management team, we also have a set of new and exciting opportunities that have the potential to deliver further shareholder value and to endure the company remains a very attractive investment proposition.”