The head of electronics retailer Dick Smith says the company is continuing its turnaround, with stronger sales and earnings on the horizon, even though shareholders are yet to see any benefit.
The company’s share price has traded around or below its $2.20 list price for most of its first four months on the market, but chief executive Nick Abboud says the company’s turnaround strategy is working.
Sales were up one per cent in the three months to March 31, an improvement on a five per cent slide recorded during the final six months of 2013.
“This result hopefully demonstrates the momentum we’ve got within the business,” Mr Abboud said.
“I can’t control the share price, all I can do is deliver the result to the market.
“So we’re going to do continue to do that and at some point there will be some support behind the Dick Smith share price.”
Mr Abboud wants to increase the number of stores Dick Smith has in operation from 368 to 400 by mid-2015, and says the company is continuing to cut costs in its head office and supply chain.
“We’re taking a number of costs out of the business as well as growing the business through new stores, so next year we are going to have a lower cost of doing business and a higher sales volume,” he said.
“So we’re well placed for an ongoing growth story.”
The company’s takeover of David Jones’ electronics’ departments was also paying off, with sales up around 50 per cent since October, he said.
“You’re talking a big improvement from when we took it over.”
The arrangement worked for Dick Smith because of its stronger buying power, he said.
The contract with David Jones would continue regardless of that company’s planned takeover by South Africa’s Woolworths, Mr Abboud said.
Dick Smith shares were up four cents at $2.24 at 1455 AEST on Thursday.