The company reporting season is gathering steam - and some early results show firms posting strong and healthy bottom lines. A sampling from yesterday:
Pacific Retail
Appliance retailer Pacific Retail, threequarters owned by Eric Watson's Cullen Investments, reported a net profit for the March year of $7.7 million, up from a $800,000 loss in the 1999 year.
Revenue increased 7.2 per cent to $362.4 million while the operating profit rose to $15.5 million from $9.1 million.
The result was affected by a $2.3 million unusual loss including a $970,000 severance payment to former chief executive Nick Lowe. Last year's result included a $7.1 million loss.
Chairman Maurice Kidd said: "By focusing attention on getting the fundamentals right across the operational spectrum - marketing, merchandising, staffing, logistics and management - we have significantly improved our ability to deliver stronger gross margin."
He said the company had lifted its market share.
"This result, and the way that it has been achieved, are squarely in line with the strategy of majority shareholder Cullen Investments to identify and take positions in market sectors that provide the products and services that tomorrow's consumers, in growing numbers, will demand."
Chief executive Stefan Preston said that while the current economic climate tempered the group's expectations going forward, the result demonstrated its ability to achieve sustainable growth in operating revenue and deliver it smoothly through to the bottom line.
In the past nine months, Mr Preston said the company had assumed greater control of telecommunications and head office expenses, rationalised logistics through stock system integration, improved levels of aged stock, introduced an internal marketing team, enhanced merchandising and executed more profitable targeted promotions.
The 90-store group, which operates the Noel Leeming, Bond & Bond and Computer City brands, has a no-dividend policy although in March it announced a one-for-nine bonus.
Mainfreight
Transport company Mainfreight posted a 30 per cent gain in bottom-line profit to $8.98 million for the March year.
Revenues rose 9 per cent to $312.61 million and operating profit was $14.73 million.
Mainfreight managing director Bruce Plested said all divisions had improved profitability.
"This is a pleasing result in line with company and market expectations," Mr Plested said.
The Australian businesses had turned around and Mainfreight saw good medium-term prospects in its offshore investments.
During the year the freight forwarding company took a 49.5 per cent share of American sea freight business CaroTrans International.
Just after the end of the March 2000 year it bought K&S Express, an Australian domestic freight forwarder.
Interest expenses over the financial year rose $400,000 to $1.84 million, but depreciation and amortisation was in line with the previous year.
Radioworks
RadioWorks repaid Canadian media company CanWest's faith by posting an after-tax profit of $5.6 million, up 43 per cent, before goodwill. Last year, the company posted a $750,000 profit.
But $14.4 million goodwill bit into the accounts, leaving a deficit for the March year of $8.8 million.
The write-off in goodwill was associated with the amalgamation of Radio Otago in August last year. It is the company's policy to write-off goodwill in its entirety following acquisitions.
CanWest, which owns TV3, has recently purchased 72 per cent of RadioWorks.
Total income for the group was $46.6 million, up 48 per cent on the $31.4 million in the 1999 year.
Trading in the year included eight months contribution from the former Radio Otago operations.
The EBITDA (earnings before interest, tax, depreciation and amortisation) was $9 million, or 83cps.
The company said it was facing certain but unquantifiable demands upon its financial reserves arising from the planned tender of the 101-108MHz FM band and so has not declared a final dividend.
It said that to position the company for the tender, it considered it prudent to apply all proceeds from cashflow into reducing interest-bearing debt, which stands at around $8 million.
The dividend policy would be reviewed after the tender, the company said.
RadioWorks shares closed up 2c yesterday at 770c.
Horizon Energy
Electricity lines network operator Horizon Energy Distribution posted a tax-paid profit of $5.96 million for the March year, compared with a loss of $5.93 million the previous period.
The result is for the company's first full year as an electricity lines company - its retail and generation businesses were sold in March last year.
The profit included one-off interest revenue of $2.5 million from the sale of the retail and generation businesses, the company said.
Shareholders' funds reduced from $127 million to $28 million, reflecting the return of $101.5 million worth of capital to shareholders and the cancellation of three out of every four shares in October last year.
The number of fully paid shares now stood at 4.998 million.
The company's assets total $73 million, with total liabilities of $45 million, including term debt of $39.5 million.
Chairman Colin Holmes said the result was close to directors' forecasts and reflected the more certain income stream of a lines company, which was not subject to the volatile fluctuations of wholesale electricity prices.
In a bid to reduce costs, the company had called for tenders to manage its operations, and negotiations with a preferred tenderer were expected to be concluded by the end of the month.
Companies post results that please
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