News Service from House Harris

JB Hi-Fi to cash-in on stimulus handout

SYDNEY, April 6 AAP - Electronics retailer JB Hi-Fi Ltd and furniture and electrical goods seller Harvey Norman Holdings Ltd are two companies expected to cash in on bonus cash payments being handed out to taxpayers.

The federal government bonuses, which are aimed at supporting jobs in sectors like retail by stimulating consumer demand, are being sent out this week as part of a second $42 billion fiscal stimulus package.

JB Hi-Fi Ltd said on Monday it expected to benefit as young consumers it dubs the "spend generation" treat themselves to new gadgets and home entertainment equipment using the cash handouts, worth up to $900 per person.

"(The handout) is going to many of the demographic that love JB, which is the young males and females, the 18 to 30 year olds," JB Hi-Fi chief executive Richard Uechtritz told told AAP in an interview.

"A lot of them don't have mortgages, their sentiment is not as low as people who have share portfolios that are worth half now, and real estate that is down - they are the spend generation."

Mr Uechtritz said sales of laptops, games, iPods and iPhones were likely to spike in coming months.

Under the bonus scheme, those with a taxable income of up to $80,000 will receive $900, those with an income of $80,001 to $90,000 will get $600 and those earning between $90,001 and $100,000 will be sent $250.

"JB Hi-Fi together with Harvey Norman are going to be the two discretionary retailers that are likely to benefit the most from the stimulus," Austock Securities client adviser Michael Heffernan said on Monday.

"People might go and buy something at JB. They're not going to buy a plasma TV, but they might buy some cheaper electronic gear.

"At Harvey Norman, if people have been saving up to buy a major piece of furniture item, this $900 could be a significant step along that direction."

Ord Minnett retail analyst Richard Ivers said he expected JB Hi-Fi to benefit significantly from the stimulus as most generation X and Y consumers will receive the cash payment.

JB Hi-Fi shares soared 20 cents or 1.64 per cent to $12.40 on Monday while Harvey Norman gained 11 cents or 3.99 per cent to $2.87.

Supermarket giants Woolworths Ltd and the Wesfarmers Ltd-owned Coles, as well as Metcash, which runs the IGA stores, could also benefit from the bonus, brokers said.

"When people have more money they might go and buy some additional luxury-type foods that they might not normal consider," Mr Heffernan said.

Some of companies expected to experience little or no benefit from the bonus handout include luxury retailer OrotonGroup Ltd, upmarket department store group David Jones Ltd and fashion retailer Noni B Ltd, brokers said.