Ladies and gentlemen, welcome to Shaver Shop's Results Presentation and Investor Conference Call for the first half of the 2022 fiscal year. Please note that today's call is being recorded. There will be a presentation followed by a question-and-answer session. Presenting today will be Cameron Fox, Shaver Shop's CEO and Managing Director, and Larry Hamson, Shaver Shop's CFO and Company Secretary. If you wish to follow along with the slides, Shaver Shop's presentation has been lodged with the ASX and is also available from Shaver Shop's Investor Center website. I will now hand you over to Mr. Cameron Fox. Please go ahead.
Good morning, ladies and gentlemen, and thank you for joining us today. In terms of agenda, I'll first run through the highlights of our results for the first half of FY 2022 and some of the key sales and operational drivers for the business. I'll then hand over to Larry, who will take you through the details of the financials before I wrap up on our trading update and outlook. Let's begin. Moving to slide three. Similar to what we've experienced over the last 24 months, the first half brought with it a number of challenges. Pleasingly, we were able to manage through each of these and ultimately deliver a very strong set of first half results. Our consolidated sales grew 2.8% to AUD 127.1 million.
This is another record for Shaver Shop and was achieved despite us losing more than 6,000 in-store trading days or 28% of available in-store trading days due to government restrictions associated with COVID-19. The sales result was underpinned by the acquisition of the last six franchises in February 2021, as well as the 37.2% growth in online sales. Now, to put that into perspective, online sales were AUD 51.6 million in the first half or 40.6% of total sales. This equates to more than 370,000 online orders that were picked and packed by our store teams, given we still fulfill almost all online orders from the nearest store to the customer. Now, compared with the first half two years ago, our sales increased 18.3%.
This clearly reflects the strength of Shaver Shop's performance since the pandemic began, and when comparing to the growth of 2.8% versus last year, reinforces that last year's first half result was an exceptional one for our business. As expected, gross profit margin declined slightly by 90 basis points, but was still very strong at 43.8%. It is up 250 basis points on the half yearly result from two years ago. Operating expenses remain well controlled, representing 22.9% of sales in line with the result from last year. This led to NPAT dropping 8.6% to AUD 13.1 million and earnings per share of AUD 0.106, down 9.4% on last year's result.
In the context of our store network having been closed to customers for more than a quarter of the available trading days, this is a very pleasing result overall and reflects underlying demand for our product range and the strong fundamentals of the business. Our balance sheet also remains exceptional, with AUD 36.3 million in cash and absolutely no debt. Shaver Shop generated AUD 42.7 million of operating cash flow in the first half, which, as always, is largely due to the extended payment terms we receive from suppliers in the lead up to Christmas. Our cash balance and trade payables will naturally reduce in January and February as these suppliers are paid.
Finally, in terms of capital, as indicated at our full year results in August, the board is focused on continuing to manage Shaver Shop's capital efficiency with the intention of continuing to increase the dividend payout, provided it delivers the most attractive returns for shareholders. Accordingly, the board has once again approved an increase in the interim dividend to AUD 0.045, up 40.6% and fully franked. This still allows us to undertake the investments we need to grow the business, including executing our omni-retail initiatives, opening two new stores in the second half, and refitting two of our existing premises. Overall, another very impressive financial performance of the business and particularly pleasing in light of the environmental factors we needed to deal with. If we move to slide 4.
Now it may sound like a bit of a broken record, but our team, particularly our store teams, remain our core competitive advantage and what separates us from the competition. We have passionate and dedicated staff who live, breathe, and love coming to work at Shaver Shop each day, and this was once again reflected in our incredible NPS scores, being an average of 88 in the first half. Despite significant challenges in their rosters and availability due to COVID-related issues, our store teams keep delighting customers with their exceptional product knowledge and outstanding customer service. I'm extremely proud of our team and how they have adapted while continuing to uphold Shaver Shop's values, which center around excellence in customer service. The Health & Safety of our teams, our customers, and the broader community remains our top priority. Our online experience also continues to improve.
We stepped up our online delivery options and are in the final stages of a project that will enable us to deliver multiple logistics partners to deliver online orders in the second half. This will now include a priority same-day offer, as well as an ability to choose between multiple courier partners. Click and collect also became a meaningful proportion of online sales and app as customers chose to avoid potential postage delays by coming into our stores. Our online customer base increased almost 50% to 650,000 customers in the last 12 months. With projects underway to segment our database into cohorts with similar characteristics, we're on track to deliver initiatives to increase the number of returning customers to Shaver Shop, as well as accelerate their shopping cadence. We expect these initiatives to go live in the second half.
Our buying and merchandise teams have also been very active with the Therabody, Tidal , American Crew, and Tooletries brands all being added in recent times. Finally, our store portfolio now sits at a total of 121 sites, with seven of those being in New Zealand. These stores in Claremont, WA, Hervey Bay, Queensland, will be added in the second half, but given the seasonality of our business, are not expected to generate meaningful sales or earnings until the next financial year. In addition, Bondi and Eastgardens , key stores in New South Wales, are currently closed as they undergo a facelift, and our Perth CBD store is moving into a new outstanding site at Piccadilly Arcade on Hay Street. We are also evaluating a few options for new stores in New Zealand, a market which continues to go from strength to strength.
We have a number of opportunities to increase our store footprint, and we'll keep applying our prudent return thresholds before giving the green light to these investments. Slide 5 provides a summary of the key drivers impacting our top line as well as more perspective around the growth we've experienced over the last two years. Now, Shaver Shop operates in the attractive and growing personal care and grooming sector for men and for women. This is a mass market where innovation is rampant, with global suppliers investing AUD millions each year to bring salon-quality solutions to the home. In our niche of men's grooming, we believe this segment is growing faster than the broader market as men, particularly younger men, become more beauty conscious in the social media age.
This means they have tools in their arsenal, more tools in their arsenal, to either trim the hair on their heads or their faces or anywhere else on their body. There are strong fundamental tailwinds supporting our business that we believe will be with us for many years to come. As you can see from the top graph, revenues have grown strongly, up 18.3% compared to two years ago, with organic growth, particularly online, being supplemented by the franchise acquisitions we did this time last year. In the bottom graph, we split out the key drivers versus the prior corresponding period.
The benefits of being a multi-channel retailer with both bricks-and-mortar stores and a strong online capability is clearly visible in this chart, with in-store sales declining approximately AUD 10 million across all stores classification in the first half, but being more than offset by the AUD 14 million increase in online sales. Last year, we had Victorian stores closed for almost three months. However, in the first half of FY 2022, our biggest two trading regions, New South Wales and Victoria, were both closed to in-store customers for almost all of the first quarter. This led to Shaver Shop losing around AUD 10.5 million of in-store sales from these locations.
Concerns about COVID-19 with the Delta and Omicron variants had a material impact in the first half of this year, which caused customer foot traffic declines and sales reduced by AUD 1.9 million for those stores that were able to trade on the same days in both years. This was partially offset by the incremental contribution from the new Bunbury store as well as the incremental in-store contribution from the franchise buybacks. If it were not for the growth in online sales, our top-line performance would have gone backwards by a significant margin. The next slide shows our quarterly sales for the first half in comparison to the prior three years.
You can see that while sales growth declined by 5.1% in the first quarter, as New South Wales and Victorian stores reopened, we saw a strong kick in second quarter sales, up 8.0%. Unfortunately, the strong rebound at the start of the quarter was not able to be sustained after Black Friday and Cyber Week promotions when Omicron surfaced. As the number of COVID cases rose sharply, we saw shopper foot traffic decline materially with the last-minute Christmas shoppers and bargain hunters over Boxing Day reluctant to spend in the way they had done over historical periods.
While that was very disappointing given the strong October and November trading results and our expectations of very strong Christmas sales, quarter two was still an exceptional result when you compare to two years ago, with sales up 21.1% and the half-year result being up 18.3% compared to first half FY 2020. Moving to slide seven. Our omni-retail investments have continued to deliver with 37.2% growth in online sales to AUD 51.6 million. The sales growth was primarily due to an increase in transaction volumes, supported by a slight bump in average transaction value. To put into some perspective, our store network picked and packed more than 370,000 online orders in the first half, or around 2,000 online orders on average each day for every day.
Over the last 12 months, more than 650,000 customers have chosen to shop with Shaver Shop online. Now, that represents an increase of 48.7% compared to the same time last year. Pleasingly, returning customers represented almost two-thirds of total online sales in the first half of FY 2022. Our ability to seamlessly offer click and collect was an important asset in the lead up to Christmas, when customers became increasingly concerned with the very well-publicized post as well as, of course, the rise of Omicron. Click and collect represented more than 10% of sales in the first half, rose to 20% over the month of December, and represented more than 35% of online sales in the week before Christmas. Now lastly, from a revenue perspective, we experienced a swing in category mix across the first half.
Hair cutting remained our largest category overall, representing 35% of total sales in the first half. However, after lockdowns ended and salon and barber shops reopened, haircutting share declined and swung towards long-term hair removal, DIY massage category, fragrance, and power oral care in the lead up to Christmas. These categories were strong performers in the second quarter, but generally have lower than company average gross profit margins, and accordingly, put some downward pressure on consolidated gross profit margins, which dropped 90 basis points in the half to 43.8%. This is still a very strong result for the company and above our long-term average. To provide some context, our gross profit margin of 43.8% was up 250 basis points on two years ago.
Our clean shaving categories, like men's Electric shavers and men's manual shaving, continued to have soft demand as work from home orders remained in place through most of the half. We expect renewed growth in these categories as CBD offices reopen and men revert to a more clean-shaven look in the office environment. Finally, on product mix and category mix, 24 of our top 30 products by sales were exclusive to Shaver Shop in the first half. This is very consistent with the levels achieved over the last five years and continues to reflect suppliers' confidence in Shaver Shop's business model and ability to maximize sales of their latest product innovations in personal care and grooming category. With that in mind, I'm gonna hand over to Larry to take you through the financial results in more detail.
Thanks, Cameron. Before I start talking to the numbers, it's important to reiterate the context in which our results were achieved. In particular, the impact of lost in-store trading days due to government restrictions needs to be at the back of your mind when analyzing our results, given we expect our stores to contribute roughly 70% of our sales day-to-day in a normal trading environment. While sales increased 2.8% in the first half, this is actually a very strong result when you consider that customers were not able to shop in our stores for more than 6,000 trading days. Gross profit margins decreased 90 basis points to 43.8%. As Cameron mentioned, this is still well above the long-term averages for the first half. We continued to manage operating expenses closely and adjust our cost base as circumstances require.
This led to operating expenses as a percentage of sales remaining flat with the prior corresponding period at 22.9%. I'll discuss how the mix of operating expenses changed on the next slide. From a pure dollar perspective, operating expenses increased 2.8% or AUD 0.8 million to AUD 29.1 million in the first half due to a combination of, A, an increase in the number of corporate stores after we acquired the last six franchises, B, higher marketing and advertising costs, and C, higher direct costs associated with online sales. This was partially offset by a decline in employment costs as difficult but necessary decisions were taken to stand down casual staff and reduce permanent and part-time hours during lockdowns.
Depreciation and amortization and interest have become relatively fixed costs and are now primarily impacted by any changes in our store lease portfolio. With the addition of the last six franchise buyback stores in the second half of last financial year, we now see lease amortization and interest associated with these stores having an incremental cost impact on the interest and amortization lines in the P&L in the first half. The second half lease interest and amortization should, however, be relatively flat with last year's second half result, given the acquisition of the six stores was completed in early February 2021. Net profit after tax decreased 8.6% to AUD 13.1 million, and earnings per share came in at AUD 0.106, which were both the second highest half-yearly results in the company's history, behind last year's exceptional performance.
After accounting for the tax benefit we get on franchise buybacks, cash NPAT was AUD 13.7 million and cash EPS was AUD 0.111 per share. Moving to the next slide. Our mix of operating expenses changed in comparison to last year as we adapted to the changing environment. We have always operated a lean cost structure at Shaver Shop, and the first half of FY 2022 was no exception. As mentioned on the last slide, we unfortunately found it necessary to stand down a large number of our casual workforce in New South Wales and Victoria during Q1, and in the ACT and New Zealand over other parts of the year. This, together with savings at our support office, delivered a reduction in total employment costs of approximately AUD 1 million.
The drop in employment costs was largely offset by an increase in direct costs associated with the growth in online sales. The most material of these costs, as I mentioned before, were postage as well as merchant fees, including buy now, pay later commissions. Occupancy costs once again benefited from rent abatements negotiated with landlords for the lockdown periods. This value was approximately AUD 0.5 million and equivalent with the first half rent abatements secured in the prior corresponding period. Other than adjusting for the short-term changes caused by COVID-19 just highlighted, we don't foresee material incremental operating expenses being required by the business in the future. All else being equal, organic sales growth and the reversion to in-store trading should hopefully deliver some operating leverage for Shaver Shop in future years. Slide 12 provides our best estimate of the key drivers of NPAT.
To do this, we have classified each store as either a greenfield, buyback, like-for-like store, or permanently or temporarily closed. To be clear, a like-for-like store for this analysis is one that was open and operated as a corporate store in both the prior year as well as the current year, and was not closed for more than five days in any given month. If a store was closed in either half for five or more days in a particular month, its monthly results for that, for both the last year and this year is classified as closed. Not surprisingly, you can see that the biggest impact to profitability was the temporary closure of the stores across New South Wales and Victoria due to government-imposed trading restrictions.
These are our best estimates, as it's extremely difficult to allocate store costs on a daily basis to reflect when stores are open or closed to the public. When stores were able to be open, as reflected in the like-for-like bar, profitability was relatively flat year-over-year, with 3.6% like-for-like sales growth being offset by lower gross profit margins. Incremental gross-profit contributions came from both the greenfields, from the new Bunbury store that we opened, as well as the franchise buybacks that we undertook. This was offset by slight increases in marketing expenditure, as well as corporate overheads and reduced franchise fees. Moving on to slide 13.
The AUD 13.1 million in net profit generated in the first half translates into AUD 0.106 per share, which is down slightly on last year, but still 74% above the result from two years ago of 6.1 cents. The continuing strong performance of our business combined with our conservative balance sheet has led the Board choosing to increase the fully franked interim dividend by 40.6% to AUD 0.045 per share. This is up 114% compared to the AUD 0.021 , 80% franked payout from two years ago. As indicated at our full year results in August, it's the Board's desire to continue to increase Shaver Shop's annual dividend payout, subject to any other better uses of the capital for shareholders.
It's also the Board's intent to seek to bring the value of the interim and final dividend payments closer together, so that the final dividend payout is not that much substantially higher than the interim dividend. The FY 2022 interim dividend has a record date of the 17th of March 2022, and a payment date of the 31st of March 2022. That brings us to Shaver Shop's balance sheet, which continues to be in a very strong financial position. Net cash was AUD 36.3 million at the end of December, which was up AUD 28.9 million compared to our 30 June 2021 balance sheet, and reflects the fact that our first half always generates very strong cash flows due to the seasonality of our business, as well as the nature of the business that we operate.
Each year, we work with suppliers to negotiate extended trading terms for Christmas stock purchases. This generally means we sell through the stock before we need to pay our suppliers, which significantly de-risks our business and puts us in a very strong liquidity position at the end of December. You can see that this time last year, we had net cash of AUD 41.1 million at 31 December, and that over the course of the second half of the financial year, that cash balance declined to AUD 7.4 million at 30 June as we repaid suppliers for Christmas stock purchases, paid dividends, and also completed the buyback of the last six franchise stores. In addition to the large cash balance, Shaver Shop Group has access to an undrawn AUD 30 million debt facility.
This facility matures on the 31st of July this year, and we are already in constructive dialogue with our banking partners regarding its renewal. Our ending stock levels were relatively consistent with 12 months ago at AUD 24.6 million. This represents around AUD 200,000 per store and is well down on the stock levels we maintained prior to COVID. We believe these new levels are sustainable and pleasingly, our inventory position remains very clean. Finally, in terms of net assets, we now have a shareholder's equity balance of AUD 80.9 million prior to our interim dividend payment, which gives us a 12-month return on closing net assets of 20.1%. This is slightly down on the prior comparative period, but the 20% return on capital again reflects the Board's desire to manage capital efficiently.
My last slide today deals with our cash flow. Operating cash flow in the first half was AUD 42.7 million, up approximately AUD 1.5 million on the prior corresponding period. As indicated previously, our first half always generates strong operating cash flow, and our second half generally has negative operating cash flow as we pay suppliers for Christmas stock purchases.
Over time, our strong cash flow conversion has enabled us to invest in the future of our business through new store expansion, buying back franchises, completing full store refits to bring key doors up to the latest look and feel, as well as in our ongoing program of work around omni-retail initiatives. It has also enabled Shaver Shop to pay handsome and growing dividends to shareholders, as evidenced by the payout of AUD 6.2 million in the first half of FY 2022, and today's announcement of around another AUD 5.8 million to be returned to shareholders in the second half by way of the interim dividend. In summarizing, another very pleasing set of financial results.
Shaver Shop remains in a very solid financial position and operating position, with the flexibility to invest in organic or acquisitive opportunities when they arise, subject to them meeting our strict investment criteria and return hurdles. Thanks for joining today. I'll now hand you back to Cameron for the trading update and outlook.
Thanks, Larry. The first half of FY 2022 was characterized by significant trading volatility. Quarter one was very challenging, with long-term lockdowns in New South Wales, Victoria, New Zealand, and the ACT being combined with snap lockdowns in other states. Quarter two started with a bang as New South Wales and then Victoria reopened, with the strength continuing all the way through November and at the end of Black Friday promotion. The hopes for a very strong Christmas were unfortunately short-lived as the rise of Omicron led to subdued customer foot traffic, softer retail sentiment, and a reluctance of shoppers to go to shopping centers, both in the lead up to Christmas as well as through the critical Boxing Day week. The demand softness continued through mid-January before recovering at the end of the month and through into early February. Sales data results remained quite volatile and difficult to predict.
Customer foot traffic remains well down on pre-COVID levels, but pleasingly, propensity to spend remains elevated, which has led to a two-year total sales growth rate of 22.6% in the second half to date. Compared to the same time last year, total sales have increased by 6.2%. Online sales continues to be the key driver of growth against both the one-year and two-year period comps, up 23.8% and 149.6% respectively. Please note that due to the postage delays we experienced this year, we needed to defer a higher value of online sales that were not delivered to our customers as at 31 December. This reduced our first-half sales growth and has increased our second-half sales growth, but has no impact on our year-to-date growth figures.
The reluctance of consumers to spend time and browse in stores reflected in our like-for-like sales being flat in the first seven weeks of the second half. Compared to two years ago, like-for-like store sales are up 16.8%, reflecting the continuing relevance and demand for Shaver Shop's offering. In-store sales have gradually improved into February, which bodes well for the second half, given our stores are still expected to represent around 70% of our total sales in the future. We expect in-store trading will continue to improve as third dose vaccination rates rise and concerns over Omicron subside with time. Importantly, our service metrics continue at or above our internal targets, with our store teams remaining focused on the job at hand. Like most retailers, we experienced significant staffing impacts at the start of the half from self-isolation requirements associated with COVID or being close contacts.
Pleasingly, despite these short-term challenges, we were able to keep all stores trading. We are hopeful that we'll have increased workforce stability for the rest of the second half. In terms of supply chain, we're not experiencing any broad-based issues with stock availability, and discussions are just commencing with suppliers around promotional purchases for Mother's Day and our end of financial year sales event. We also heard rumors of selected price rises being considered by suppliers. As always, we will take a very aggressive stance to protect our position. With our market share, our breadth and depth of range in our core categories, we have the ability at every single price point to switch sell away from suppliers who choose to drive price rises through that we are simply not aligned with.
We're committed to opening two new stores in the second half, and if discussions go well, we may end up opening a new store in New Zealand as well. Our omni retail investments are continuing with projects going live that will enhance data analytics and our understanding of, and communicating with the various customer cohorts. We will also be launching a platform that will significantly enhance the number of logistics options customers can choose for online orders. Overall, Shaver Shop remains in a great position with a differentiated specialty retail offering centered around passionate store teams and providing excellent customer service and the sale of exclusive product lines. We're in a growing market with plenty of innovation still to come, and we continue to expand our category and product range as well as our market awareness, both here in Australia as well as beyond.
While this position gives me strong confidence about Shaver Shop's long-term prospects, the uncertainty caused by COVID-19 remains in the short term, and accordingly, Shaver Shop is not in a position to provide FY 2022 sales or earnings guidance at this point in time. Thank you for your attention. Larry and I would now be pleased to take any questions.
Your first question comes from Danny Younis from Shaw and Partners. Please go ahead.
Good morning, Cameron. Good morning, Larry. Well done on a super result given the environment. I've got two questions to kick off with, and they may be for Larry. Larry, you said the operating leverage in future years should start to open up, which is a big positive. If we can focus on the second half that we're in at the moment in terms of the cost of doing business. In the first half, it was AUD 29 million in total or around 23% of sales. You had a little bit of a benefit there from your staffing costs that are down about AUD 1 million year-on-year, and your operational was up and your marketing and advertising was up. Should we look at the second half cost of doing business?
Should we see, you know, maybe a reversion of staffing costs increasing by that AUD 1 million that you lost in the first half? Overall, how does the cost of doing business look like in the second half relative to the first half?
Generally speaking, thanks Danny, for your comments on the results. Generally speaking, our second half always has a higher cost of doing business percentage of sales than the first half, just because we're a seasonal business. With strong sales coming through in November and December, we get very strong operating leverage in those two months in particular, which results in our second half having a higher cost of doing business percentage than the first half. Yes, you know, assuming no lockdowns and those types of things, I do expect our employment costs to increase in the second half.
It's probably not, you know, if you look half on half, Danny, we do have a large ramp up in casual staff in the first half coming into November and December. You might not see that full AUD 1 million coming through because we won't have that same ramp in the second half. It's probably in the order of AUD half a million-AUD three-quarters of a million that you might see come in in the second half. You know, again, assuming there's no lockdowns, touch wood. Marketing costs, a lot of the analysis around this, you're best looking at the second half from last year and comparing and trying to build that base from which to forecast from. Last year in the second half is a relatively normal second half for us. There weren't significant long-term lockdowns.
We had a number of short-term lockdowns here in Victoria, but most of the other states were relatively untouched. You know, probably the second half of last financial year is as good a base, other than having to add in for the six franchise stores that we acquired and some operating costs related to those. That's probably your best base for building your operating expense forecast going forward.
Great. No, that's very helpful. On gross margins, you've done a great job there, 43.8%, versus historical. The year-to-date trading seems to suggest that's gonna come down to about 43%. I'm just wondering, I mean, you've pointed out lower margin categories like massage, fragrance, laser hair removal. Apart from that side of the equation, how much cost inflation is there in COGS? I think, Cameron, you touched on it in your outlook statement. How much was there in the first half, if any, and what do you expect in the second half? Are we expecting, you know, 10% increases from your suppliers or?
I mean, I'll start on that one, and if Cameron has anything to add on to it, he's welcome to. I guess in terms of the first half, very little cost inflation, Danny. We end up every year lining up our promotional program, try and get it mostly done by June or July. Sometimes it leads into August, but that means we locked in a lot of prices, you know, pretty early on in the year. Very little CPI impact or price increases that came through in the first half.
What we did experience, to give some context around that strong margin result in the first half is over that first quarter, when we had the long-term lockdowns, we still saw very strong sales coming through our clipper category, you know, a market that we dominate, which has almost our highest margin, if not the highest, category margin in our business. Also one of our biggest, well, across that range of hair cutting solutions, it is the largest category for the business. The growth that we saw in that first quarter, you know, basically reverted and went across to those other lower margin categories that we referred to in the presentation, like our oral care, massage, and long-term hair removal solutions for women. We've basically seen that continue in the second half, so far.
That 43.8% certainly benefited from the strong hair clipping and hair cutting performance in that first quarter. From my perspective, it's probably a bit too early to tell, I guess, in terms of price rises and what may come through that could impact this financial year. You know, those discussions are just commencing at the moment, and even if price rises were pushed through by a supplier or two, then it's likely not to impact the full year result this year that much. It would be more of a consideration for next year. That's definitely the case given we're already locking in some of those promotional and pricing programs for Mother's Day and in the financial year at the moment.
Yeah. Look, Danny, just to, you know, probably expand on Larry's point, too. There's always one or two suppliers that may try to push through an increase, but, you know, I can't stress enough that we've always been very, very aggressive on a supplier who tries to push through a price rise, particularly within our core business of men's grooming. Remembering that one of our greatest strengths is our ability to switch suppliers. It's not like we only have one option at each price point and category.
I guess one of the benefits of our models is we have lots of exclusive products, big branded exclusive products within each category, particularly within the clip and trim and the men's electric shaving categories. If one supplier is to take a price rise that we think is unreasonable, then we certainly change our strategy, and we switch sell toward another still very credible brand that hasn't chosen to take cost price increases. That's been our ethos for ever and a day, and no doubt that'll be our ethos moving forward.
Great. Okay. Maybe one final one, maybe one for you, Cameron. A year or so ago, you picked up the six franchisees, you know, they're all A-grade stores. Unfortunately, you had COVID over the last 12 months, which made trading pretty difficult. Can you maybe just give us a rundown on how those six new stores have performed over the last 12 months? Have you done anything different or new because of COVID or not of COVID? I noticed, you know, that in the half, they contributed about AUD 2.5 million in sales. Were you happy with that number? If you could just maybe provide a little bit more information about those A-grade locations in the last 12 months.
Yeah. Look, I guess the first thing I always talk about is people. I think that's always probably the biggest challenge is when you take something or take six stores that have been very successful franchise stores and move them to a corporate store environment, you know. You know, it's that pain of work. There's always an element of risk there, particularly if they're a long-standing franchise. You know, we may have a slightly different operating ethos than what the previous franchise owners did. What we have found, and most importantly, Danny, is the people are right, the people are strong, the training's gone well. From a culture point of view and an in-store service point of view, the biggest thing is I'm really happy. I'm really pleased.
You know, when the stores have been open for an extended period of time, like in the lead up to Black Friday, Cyber Week, those six stores were just terrific to have. I mean, they have big trading doors, you know, Parramatta, Burwood, you know, absolutely terrific stores, Sydney CBD. When the foot traffic's firing, you know, healthy, and, you know, there's no lockdowns, obviously those six stores are absolutely terrific to have on board. We just need some continuity of trade. I think that's the big thing. That's not really specific to those franchise stores we bought back. I think that's just across, you know, New South Wales, Queensland and seaboard states in particular.
Excellent. Thanks for that. Well done again.
Thank you.
Thanks.
Thank you. Your next question comes from James Casey from Ord Minnett. Please go ahead.
Good morning, gents. A couple of questions, if I may. Firstly, just on the online sales, the percentage of online sales, just broadly speaking, where do you see that settling as the stores, fingers crossed, are able to open, remain open during the half?
Yeah, look, I think Larry may have touched upon it during the presentation. Broadly we sort of, you know, think online sort of normalizes or around 30%, bricks and mortar, obviously 70%. We're sort of seeing elements of that. When the reopenings have occurred across New South Wales and Victoria from mid-October, that was roughly the ratio that we saw. Then obviously online gets a serious kick out when there's any form of lockdown or a public apprehension, I guess, around, you know, rising case numbers associated with COVID-19.
Okay. With regards to the second half, can you just remind me what the disruptions were in the PCP that you're cycling this period?
It's mostly in Victoria. As I mentioned before, the other states are relatively untouched. My recollection is there's at least three or four snap lockdowns here in Victoria, ranging from sort of five days in length. I think there was one that we've already passed in February that was sort of five days in length, all the way up to two to three weeks from memory coming into sort of later in the half. There's probably four to five. Well, four separate situations and then isolated sort of one or two day lockdowns in other states. I don't have the exact numbers, unfortunately, James in front of me.
No.
It's mostly Victoria that was primarily impacted.
Okay. Just with the additional 2 stores, would there be some small store opening costs given they're opening up later in the quarter? A bit of just a small drag in the second half. Is that the best way to think about the new stores?
Yeah. Very small. There might be.
Yeah.
You know, across the two stores, it's certainly less than AUD 100,000 that we'd be expecting. What we've found, you know, historically is because the Shaver Shop brand is so well known now, as long as we get the pre-marketing right, you know, there's usually a fairly strong uptake immediately on opening the door. Yeah, there's some staff training costs and those types of things in the lead up. If we get the marketing right in the lead up to the store opening, it can actually have a little bit of a kick. We're certainly not expecting anything break even or better in the second half from those stores, a slight loss.
Okay. Thanks, James. Well done on the result.
Thanks a lot, James.
Thank you. Your next question comes from Rodney Van Rooyen, Private Investor. Please go ahead.
Well, firstly, thank you, and I'm so glad others have congratulated you, and also to your team, because brilliant results, especially considering the conditions.
Thanks, Rodney.
This is not a criticism, but I just have to hopefully have you expand on some of the costs of doing business. Slide 12 explained it really well. My two questions would be basically about that, how you're managing it, and I think others have mentioned inflation. I'd like to specifically invite you to address it online in terms of also combining it as my other area of questioning about online, how you're working on improving that side of it. Perhaps you'd be considering a mobile phone app at some point?
In terms of the operating expenses, I mean, did you have a specific question? I'm sorry, I may have missed it.
Well, I guess I know you've mentioned. Yeah, my apologies. You've mentioned previously that it's basically similar in-store and online, your agnostic as to which channel.
Yep.
Customers prefer. I'm just wondering because it's a very difficult situation to plan for, and Cameron said it well, trading continuity is what everyone would like. I'm just wondering if you're focusing more with your costs, are you going to be focusing more on building the in-store business or the online business? If so, how would you expand the online potential?
Yeah. Thanks. Understood. You're right, we are ambivalent between in-store or online in terms of how customers shop with us. After we allocate, you know, the fixed costs on what we think is a reasonable basis, contribution margins online and in-store are roughly sort of low 20% range, sort of 21%-22%. That means we would like our customers just to come and shop with us regardless of which channel they choose to use. In terms of investment, we've been pretty clear that going forward, most of our additional investments will likely, particularly in operating expenses, come through more in the online side of things.
As we're looking to roll out some of the additional initiatives that Cameron mentioned around being able to segment and communicate with specific cohorts around what their needs and desires are for certain products, around our data analytics, so we can understand the frequency with which customers shop with us and how we can improve their cadence. All those types of things are largely driven online at the moment in our online spend because that's where we have the ability to track the data. We are working towards being able to track it more in store, and there are projects, you know, that we're looking at to drive that. All the data that you would have seen around active customers, et cetera, that all comes from online, because that's the channel where we're best able to do the analytics.
That's where, in the short term at least, where we expect most of the investment, additional investment to come through. We're not talking significant incremental costs. I guess it's important to note. We're looking at, you know, in keeping our expense base roughly the same and just investing in those core projects that I mentioned.
Fantastic. Thank you, Larry.
Morning. Thanks, Ronnie.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone. Your next question comes from Daniel Kiely, Private Investor. Please go ahead.
Congratulations, Cameron, Larry, and the rest of the team on a great result. Got two questions for today. First question, have you and the board considered share buybacks as a way of returning capital to shareholders? If so, why wasn't it chosen with the low share prices on offer? That's the first question. Second question is more long term, what are your plans for business to increase value for shareholders over the long term?
Sure. I'll take on the first one, and thanks, Daniel, for the questions. Share buyback's always something that the board is considering when looking at its capital management alternatives. We did do a buyback back in 2017, an on-market buyback. It's, you know, it's something that the board considers from time to time. At the moment, the board decided to significantly increase the dividend rather than pursuing an on-market or an off-market buyback. That is something that could be back on the table at some point in the future, but it wasn't decided at this point in time. The second question was around long-term, I guess, growth and shareholder value.
In addition to trying to, you know, increase returns to shareholders by way of dividends, you know, we're focused on growing the business as well. We believe, you know, particularly in the men's grooming segment, we're in a very strong position to continue to benefit from the growth that's happening in the market, as well as from growing our share and from retargeting our customers to generate incremental sales, so increased purchase frequency and increased purchase cadence. These projects that we're talking about are important ones to help us actually understand our customers better. At the moment, 66% of our customers, as we mentioned in the presentation, had purchased from us online sometime in the past.
In the last six months, 66% of those customers that bought online had traded or purchased something from us online at some point in the past. If you look at the number of those customers that actually purchased in the last year, most of them, this would have been their only purchase in the last 12 months. We have a large range of consumable products that we are retargeting customers with in store when they're coming in the store, and we're doing that online as well. By better analyzing and segmenting our data, we think we can drive significant increase in purchase frequency and cadence from doing that. That's why we've highlighted again in this presentation. We also are looking to grow the number of stores that we have in New Zealand.
We're in dialogue with a few landlords, actually, for opening new stores in New Zealand. We've just been restricted from getting over there to actually visit the sites. If we can secure the commercials we want with those landlords and the sites that we want, then we're hopeful of opening up another six or seven new stores in New Zealand as well. As well as the incremental one or two we might do here in Australia over the coming years. Those would be the two sort of key factors, I guess, in the short to medium term that we feel will drive incremental value for shareholders. Did you have anything else you wanted to add, Cameron?
No, I think that's a really good summary. I guess separately, you've just got the organic opportunity, which is, you know, we should never forget about, which is the market itself and the category opportunity. You know, you go back 35 years, Shaver Shop was just selling Electric shavers. That's all we did. We sold Electric shavers. We fixed some Electric shavers. We've expanded. We've introduced power oral care. We're now one of the market leaders in power oral care. We only introduced IPL female solutions for females about a decade ago. We're the market leader in that. You know, hair care is relatively new for us. DIY massage is relatively new for us. All these categories we're actually bolting on, and we're expanding, you know, the adjacent categories for Shaver Shop, and we're making them work.
I think that's one of the exciting prospects, too, is, you know, the consumer demand for DIY personal care, for men and women in Australia and globally is really exciting. It's growing, a lot of innovation, and I think we're really well positioned to capitalize on some of that innovation and natural category growth. Great. Thank you for that. Thanks, Danny.
Thank you. Your next question comes from Jeffrey Ding, Private Investor. Please go ahead.
Hi, Cameron. Hi, Larry. Congratulations on the great result. I just have a question. Are you able to talk about metrics around website visitation and how that has been trending throughout the current financial year and compared to prior years?
I don't have that information directly to hand. Cameron?
Yeah, look, I mean, broadly, what we're actually seeing is, you know, website traffic is marginally up, but we're actually seeing increases in ATV from a website point of view as well, particularly over the last quarter. That in part is being driven by category mix. You know, one of our two categories have a very high ATV on average price. And our conversion levels has been relatively stable. Our conversion, it was quite high during the long-term lockdowns because people, for example, searching for hair clippers, Shaver Shop's the market leader in hair clippers. Our conversion on that category was very high, which pushed our overall conversion higher through the long-term lockdowns. You know, apart from the longer term lockdowns, conversion's been pretty steadily and perhaps marginally up.
Thank you.
See ya.
Thank you. There are no further questions at this time. I hand the conference back to Mr. Fox for closing remarks.
Thank you.
Sorry about it. You just got me there, but we're all good. Okay, back on track. As a wrap-up, let's go through our investment summary. Shaver Shop operates in a large and growing market driven by a change in consumer preference and new product innovation, as was discussed, an awful lot over the last sort of 45 minutes or so. There's no doubt COVID-19 supercharged growth in our sector and introduced a large group of new customers to Shaver Shop as people were forced to consider DIY personal care and grooming solutions. We still have significant potential to further increase our market share, again, as we've just covered. Over the last 35 years or so, we've developed an incredibly strong and trusted brand in Australia and are well on our way to doing so now in New Zealand.
Our specialty retail business model is agile, differentiated, and resilient, and is based around three key notions: Customer Service Excellence, and Unparalleled Product Knowledge, Product Exclusivity, and of course, Competitive Pricing. The investments we have made in building our online capabilities in the last two to three years means we're the leading omni-retailer in our core categories with strong online sales growth. We also have significant further potential to grow. We acquired the last six franchises with cash in February, which should deliver around AUD 1.5-AUD 1.6 million in annualized NPAT in FY 2022. We have a very strong balance sheet with no debt and have very strong cash conversion. We have an experienced management and board team that has executed extremely well over difficult times.
Finally, our board and leadership team is focused on investing for growth and improving total returns for shareholders, as evidenced by the continued growth in our dividends over time. Thank you, everyone, for your time today. We do appreciate it. That now concludes the investor briefing.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.