Pod first half profit dips

Textile design company Pod today reported a 23 per cent fall in its December half year net profit to $1.3 million and warned its full year earnings would dip to near break even.

Executive chairman George Gould also hinted that the high New Zealand dollar was causing Pod to consider exporting at least some of its production offshore .

"Identifying and developing strategic relationships with overseas suppliers to be able to produce off-shore are in progress," Mr Gould said.

Pod said a margin squeeze that had hurt earnings in the first half was likely to continue in the next six months.

As a result, it was now forecasting a full year profit, excluding abnormal gains of around $1m, "not materially greater than break even".

The latest guidance was well shy of a November forecast for a net profit of around $1.5m.

"The board is fully aware that the company's current financial performance is unacceptable and disappointing, but every effort is being made to restore financial performance to the level achieved over the last few years," Mr Gould said.

Pod was unlikely to return to the profitability levels of recent years "until next year or beyond". No dividend was declared.

Shares in Pod dipped 10 per cent, or 6c, to 54c on the news -- a fresh year low. This time last year they were trading at $1.72.

The dire result meant Pod's new chief executive, Malcolm Walkinshaw, whose appointment was announced today, has a tough road ahead of him.

Mr Walkinshaw was previous group sales manager and general manager of Mollers Homewares - Pod's best-performing division in recent years.

"Malcolm has been a great performer at Mollers Homewares, and his results speak for themselves," Mr Gould said.

"He has played a significant role in the restructure of the management team and the board is very pleased to promote him to the top management position in the company."

Pod said earnings after tax and before amortisation of goodwill in the first half were down 21 per cent at $1.61m.

That included a $1.1m net gain on sale of the Logan Textiles Brisbane property.

Excluding amortisation and abnormal items, the operating surplus after taxation was $507,000, in line with the profit warning issued in November.

- NZPA