Smiths City Group reported a 30 per cent decline in annual profit while lifting sales as the Christchurch-based retailer overhauled its operations to exit low-margin business.
Net profit fell to $5.6 million, or 10.6c a share, in the year ended April 30, from $8 million, or 15.2c, a year earlier, Smiths City said. Trading profit rose 54 per cent to $4 million on a 0.2 per cent rise in revenue to $221.9 million.
In 2015, Smiths City recognised $8.5 million in other income due to insurance payments to help repair its flagship Colombo St store.
Last May, the company appointed a new chief executive, Roy Campbell, who pushed the company to undertake a strategic review. Yesterday, it said efforts over the past year were "only the beginning of the journey" and the company will reshape its store, online and logistics operations and renew its focus on its finance business.
Smiths City repaid $10.1 million in bank debt in the year, leaving it with none.
Its finance business held $66.6 million of finance receivables and owed $56.2 million at the balance date, compared to receivables of $68.7 million and debt of $57.4 million a year earlier.
Chairman Craig Boyce said significant change included eliminating loss-making areas such as the appliance retail stores and exiting non-core business activity such as the Alectra appliance service operation.
In January, its trading arm Smiths City (Southern) agreed to buy the business and assets of Auckland-based Panmure Furniture City 1983 and its logistics operation Lucky Dragon for $5.85 million.
The shares gained 3.9 per cent to 54c, and have fallen 7.1 per cent this year.