KEY POINTS:
The Warehouse has announced annual net profit after tax of $115.5 million compared to $29.3 million last year.
Sales from continuing operations for the year ended July 29 were up 2.4 per cent to $1.76 billion, The Warehouse said today.
Net profit after tax, excluding the sale of The Base development in the latest year and the divestment of the Australian business the year earlier, was up from $96.2 million the previous year to $97.9 million in the latest year.
Total operating revenue for the year was down 5.3 per cent to $1.8 billion from $1.9 billion.
The company confirmed the final dividend of 5.5 cents per share announced earlier, bringing the total for the year to 17.5cps, along with a previously announced special dividend of 35cps.
Chairman Keith Smith said the result demonstrated continuous improvement in the group's performance and a further strengthening of its balance sheet, which would result in a total of $163.2m being distributed to shareholders in dividends for the year.
Same store sales were up 2 per cent for the year. Earnings before interest and tax were up 2.6 per cent to $147.2m.
"The result for The Warehouse New Zealand is creditable given two difficult seasons for apparel, a higher level of discounting in the market since Christmas, and our strategic investment in category start-ups, pharmacy, liquor and fresh foods," group chief executive officer Ian Morrice said.
"Despite these challenges, operating margins were held year on year."
Good growth was seen in homewares, health and beauty and confectionery. In apparel, new brands such as Bonds, Maya and Match were performing well, Mr Morrice said.
"We have also continued to invest heavily in improving service during the year; speeding up transaction times through the replacement of all our point-of-sale terminals, increasing on-shelf availability by replacing our stock allocation and store replenishment systems, together with further improvements in our distribution centres."
The second of the company's Warehouse Extra stores opened during the year in Whangarei. It was also the first conversion from an existing store.
Following the conversion of the Te Rapa store last month, no more Extra stores were planned for the current financial year, providing the company with time to refine and test the format.
"Although we are expecting overall sales in the Whangerei store to increase by 30 per cent in the same selling space, this is below our target for its first year," Mr Morrice said.
"Sales mix and gross margins in this store are broadly in line with our expectations, but operating costs are higher than originally anticipated."
Warehouse Stationery sales were up 0.9 per cent to $213.5m, with same store sales up 2.2 per cent for the year, the company said.
Growth categories included consumer electronics, computer consumables and packaging and postal products. Ebit was up 2.2 per cent to $9.5m.
"The past twelve months have been a period of consolidation for Warehouse Stationery with the significant challenges in introducing new systems putting other initiatives on hold," Mr Morrice said.
In the coming year, The Warehouse expected to increase sales despite unpredictable market conditions and continued competitor space growth.
Shares in The Warehouse closed at $5.95 yesterday, having ranged between $5 and $7.32 in the past year.
- NZPA
