KEY POINTS:
After cutting margins to retain market share, retailer Postie Plus Group Ltd has reported a $488,000 half-year loss.
The loss compared with a profit of 735,000 for the corresponding period a year earlier.
The result for the six months to January 31 came on a 12.5 per cent increase in sales on an all stores basis to $65.2 million.
A fully imputed interim dividend of 2c per share will be paid, compared to 3c per share paid for the first half a year ago.
Chairman Peter van Rij said it would be difficult for the group to achieve an annual result at the level of 2006, when the company reported full year net profit after tax rose 135 per cent to $3.9 million.
But he did say that given continued economic uncertainty it was premature to provide specific earnings guidance.
The traditional pattern for the group was for a higher level of sales in the second half-year, he said.
An encouraging level of profitable sales was recorded in February and the company was positioned to target a good recovery in profitability in the second half under normal trading conditions.
The company's emphasis on inventory control, with a resulting clean stock position, enabling it to place fresh autumn-winter season ranges onto the sales floor significantly ahead of the usual timing, Mr van Rij said.
The significant first half sales growth was pleasing in a challenging summer season, marked by fluctuations in discretionary spending by consumers.
The group's Postie+ stores had expanded sales in a competitive market, while electing to trade away some margin to ensure the apparel division would be clean of summer stocks by the end of the season, chief executive Ron Boskell said.
That had resulted in less clearance of summer stock early in the second half.
New stores at Upper Hutt and Kaikoura took the total number of Postie+ stores to 74 at the end of the first half.
The Arbuckle chain of 32 manchester and homeware stores had continued to benefit from new strategies, Mr Boskell said.
The Baby City chain of 14 nursery and children's apparel and equipment stores maintained and expanded its segment leadership with excellent sales growth.
The half-year loss announced today was in line with guidance provided by the company a month ago and its share price was unchanged in early trade today at 87c.
- NZPA
