Postie Plus continues turnaround

Clothing retailer Postie Plus today reported a turnaround in half year profit, on the back of strong sales and lower overheads.

The group posted a net profit of $735,024 for the six months ended January 31, up from a net loss of $465,597 for the same period the previous year.

Group sales for the half year were up 4.9 per cent on a same-store basis, at $57.94 million.

Group overheads were $850,000 below the previous corresponding period, with most of the savings achieved in the second quarter.

Earnings before interest and tax (ebit) were $1.7 million higher than the same time the previous year at $1.6 million.

A fully imputed interim dividend of 3c per share was declared.

Looking ahead, the group said the retail sector was likely to face considerable challenges over 2006 and 2007, but Postie Plus was well positioned to cope with an economic downturn.

The group said loyalty to Postie Plus value products generally increased in times of tightening economic conditions.

In line with the earnings guidance provided at the annual general meeting, the directors said they expected a pre-tax profit for year to July to be more than $5 million.

Group chairman Peter van Rij said Postie Plus had a positive summer season across the country.

"Whilst not traditionally including our biggest trading months, consumer confidence during the Christmas and New Year period is very important to us, and we are pleased with the good start to our financial year," he said.

Chief executive Ron Boskell said the group was focusing on reducing inventory so it could provide fresh stock to stores more regularly.

The Postie Plus Group has three retail brands -- Postie +, Babycity, and Arbuckles.

Shares in Postie Plus were unchanged at 66c in early trading today, having ranged between 57c and $1.37 over the past 12 months.

- NZPA