Kathmandu returns to profit

Profit was $9.4 million in the six months ended January 31, compared to a loss of $1.8 million a year earlier.

Kathmandu Holdings, aims to lift the proportion of total revenue it generates online to 10per cent from 6.6 per cent currently.

The Christchurch-based retailer yesterday posted first-half profit of $9.4 million, meeting guidance, and affirmed full-year forecast profit of $30.2 million. The full-year 2016 profit forecast would be a 48 per cent jump on 2015.

Sales rose 9.3 per cent to $196 million, led by Australian revenue growth of 12 per cent to $124 million, a 4.6 per cent gain to $68 million in New Zealand sales and a 19 per cent increase to $3.6 million in UK sales. Online sales rose 23 per cent to account for about 6.6 per cent of total sales, or some $13 million.

Permanent stores in the UK reduced to three from four and the company expects to have exited all of its outlets in that country in 2016, while building its UK and European online channels. Kathmandu is pursuing what it calls a blended model for growth outside its core ANZ markets.

It may follow a similar route to global competitors North Face and Patagonia which have an online presence, franchise stores and partnerships with department stores.

"I think we're doing well versus other brands in Australia" for online sales, chief executive Xavier Simonet said on a conference call. "But looking at global brands we could do better. I believe if we could achieve 10 per cent of total sales that would be really brilliant."

Kathmandu shares rose 1.2 per cent to $1.68, below the theoretical offer price from Briscoe Group of $1.80 a share made in mid-2015, which was rejected as too low. Rod Duke's Briscoe remains a major shareholder with just under 20 per cent and Simonet said he would be meeting with Duke as part of a roadshow to shareholders.

He declined to comment on whether Kathmandu was expecting a new offer from Duke.

BusinessDesk