KEY POINTS:
Children's clothing company Pumpkin Patch Ltd has reported a 6.4 per cent rise in net profit after tax to $15.5 million for the six months to the end of January.
Group operating revenue for the half was up 19.6 per cent to $180.6m from the previous corresponding half year.
Despite challenging retail environments across all its markets, especially Australia and New Zealand, sales growth was seen across all segments, the company said today.
Strong sales growth was seen in both Britain and the United States from both new store openings and increased sales from more established stores.
Quota costs of $2.2 million were incurred on the imports of Chinese-ma de products into the US and European Union, up from $0.7 million in the first half of 2006.
Excluding quota, net profit after tax would have been up 12.6 per cent to $17m.
Earnings before interest, tax, depreciation and amortisation (ebitda) for the latest half year was up 15.6 per cent to $30.5m.
Interest costs were higher than the first half of 2006 as an expanded store roll out programme in Britain and the US resulted in higher total bank debt, the company said.
It expected to carry higher average debt levels as British and US markets were developed.
An interim dividend of 4.5 cents per share was approved, compared to a 4.25cps interim dividend in 2006.
While there were some challenges in the short-term, Pumpkin Patch continued its steady growth and its aspirations to be a truly global brand, the company said.
Australian and New Zealand markets were expected to remain difficult for at least the rest of this financial year.
Pumpkin Patch said it remained a dominant force in children's apparel in those markets and would pursue store growth opportunities to protect its market position.
Whilst concerned at the impact of short-term economic factors on the result, the company was convinced the long-term strategy would remain sound through the economic cycle.
In Britain, the store roll out was expected to continue throughout this year. That might not directly lead to growth in earnings before interest and tax (ebit) in the short-term, but would enhance Pumpkin Patch's position in the market.
The US had shown early promise and Pumpkin Patch would continue to trial new stores throughout the year in a variety of formats and locations, the company said.
Pumpkin Patch shares were down 7c to $4.58 soon after the sharemarket opened today.
- NZPA
