Pumpkin Patch reveals bumper full year harvest

Childrens' clothing retailer Pumpkin Patch today unveiled a bumper full year harvest, reporting a net after tax profit of $24.6 million.

The result triples last year's $8 million figure and matched analysts' expectations of between $24-25m.

Pumpkin Patch also declared a final dividend of 4.25 cents per share.

Shares in the retailer closed yesterday at $3.30, having crept as high as $3.40 in the past week in anticipation of the result.

Pumpkin Patch's reputation for under-promising and over-delivering has seen its share price climb rapidly since listing in June last year at $1.25 a share.

Today's result excludes a one-off cost of $800,000 relating to Pumpkin Patch's push into the United States market. Taking that into account, the result is 64 per cent higher than the net after tax profit, excluding unusuals, of $15.5m posted a year earlier.

Analysts were keenly eyeing the result for signs of how the retailer weathered the unseasonall warm winter.

Total operating revenue in the year to July 31 climbed 27 per cent to $280m. Sales growth was widespread.

Earnings before interest and taxation (ebit) for the period was $37.5m, up 64 per cent on 2004.

In New Zealand, retail sales grew to $57.8m, up 26 per cent on 2004.

This was due mainly to the effect of a full year trading from 14 Urban Angel stores (the rebranded HBK stores purchased in May 2004) and new store openings.

Excluding Urban Angel stores, turnover from Pumpkin Patch stores was up 16 per cent on 2004.

New Zealand ebit increased 15.7 per cent to $10.6m.

During the year four stores were opened, taking total store numbers to 45. The retailer plans to open one new Pumpkin Patch and two new outlet stores in 2006.

The retailer's Australian stores achieved sales of A$141.4m ($156.34m), up 17 per cent. Pumpkin Patch now has 75 stores across the Tasman, 11 of which opened in 2005 -- seven in the second half of the year.

Australian retail ebit was up 27 per cent to $29m, and Pumpkin Patch plans to open another 10 stores , including two outlet stores, in 2006.

In the United Kingdom, turnover for the year was £10m ($26.21m), up 43 per cent on 2004.

"Considering the soft nature of the United Kingdom retail environment the company is very happy with this sales result," Pumpkin Patch said.

During the year 7 new stores were opened, taking the total number of stores to 16.

The ebit for the year was a loss of $300,000, compared with a loss in 2004 of $1.3m. Pumpkin Patch plans to open six new UK stores in 2006.

Turnover from Pumpkin Patch's wholesale and direct business rose by 139 per cent to $38.2m. Turnover increased across all major wholesale markets, especially the Middle East, the United States, and Ireland.

The segment generated ebit of $9.6m.

In the United States, Pumpkin Patch opened its first retail store in July. It is "too early to make any comment regarding levels of trading", although feedback from customers has been "very favourable".

The investigation and development process incurred a one-off after tax cost in 2005 of about $800,000 ($1.1m before tax).

Pumpkin Patch has leased three additional stores; two in Los Angeles and one in the San Francisco Bay Area. The stores are expected to open in 2006.

Looking ahead, Pumpkin Patch expects overall retail trading conditions to be less buoyant in 2006. However it is confident that its brand strategy will continue to generate strong trading performances.

- NZPA