The company posted adjusted full-year profit of $57.1 million, having previously forecast a range of $52 million to $56 million. Photo / NZME.
A cold winter helped boost earnings at the Warehouse, in a year chief executive Mark Powell describes as "a game of two halves".
The company posted adjusted full-year profit of $57.1 million, having previously forecast a range of $52 million to $56 million.
Adjusted profit in the second half of the financial year rose 37.4 per cent to $19.9 million.
"The first half was tough," Powell said. "We came out with that in February and the second half was a lot stronger."
Craigs Investment Partners analyst Mark Lister said the result was good and indicated the company was starting to see its hard work pay off.
However, he added it would be another few months before it became clear whether this growth would continue, with Christmas one of the most important trading periods.
"It was a good result overall and better than expectations, about 6 per cent down on last year but about 6 per cent ahead of the midpoint of their guidance range, so that's obviously a positive and the second half was very strong," Lister said. "The signs are there that things might be starting to get back on track, which is great, but I think the market will probably want to see that continue before giving them too much credit for now.
"It will be the next trading update post-Christmas that will really tell us with a bit more certainty whether changes that have been made within the business are actually delivering a return to growth."
Powell highlighted the growth achieved in online sales, increasing from $18 million in 2011 to $150 million - something which had been part of his focus over the past years.
JB Were analyst Rickey Ward said the result was good and roughly in line with expectations, but also reflected the high costs of doing business, particularly in the red sheds.
"They gave pretty sensible guidance and it's come in roughly where the market was expecting, if not slightly disappointing on a reported not adjusted level - but it's ahead at the revenue line and ahead at the operating line," Ward said.
The businesses they have bought appear to be struggling though, he said. For example, with electronics retailer Noel Leeming the cost of doing business was increasing in what was a highly competitive and commoditised segment and that was showing in the results, he said.
Shares in the Warehouse closed up 0.77 per cent to $2.62.
Yesterday's Warehouse result will be the last for chief executive Mark Powell who is stepping down at the end of January to pursue other interests. In 2011, when he took up the position, his intention was to stay for five years at most and to try to turn around the ailing Red Sheds business, which had seen seven years of declining sales, as well as expand the business into online.
"My job was very specific - broaden the group, get the Red Sheds in the right direction, get us to be a serious online retailer, really get the customer focus and people aspect of the business.
"And you do a job and then it's into another strategic cycle and that will need someone to commit to another five or seven years and I've got lots of other interests ... it's time to hand over."
When the business launched online in 2011, sales in that channel were $18 million. The result yesterday reported online sales of $150 million.
Powell said the company was on track to select a new chief before he left. He was philosophical about his time at the company.
"You never achieve everything you want to achieve ... I think it's about getting more right than wrong and I'm pretty pleased with what we've done."
Auditors PwC: Cited disruptions to operations from that IT upgrade.