Kathmandu's sales up 12% in 1st half, stays mum on dividend

Kathmandu has declared an interim dividend after suspending payments last year. Photo / NZME

Kathmandu said its group sales for the first half, including a full six-month contribution from Rip Curl, were running at about 12 per cent ahead of the same time in the previous corresponding period.

The company said its EBITDA for the half was expected to be in the range of $47 million to $49m, including government subsidies and the realisation of cost synergies.

In the previous corresponding half, Kathmandu's EBITDA came to $78.7m after the new accounting standard IFRS16 and $40.5m before the standard.

The company suspended dividend payments last year due to the impact of Covid-19.

Kathmandu plans to release its first half result for the first half to January 31 on March 23 and said an announcement on its dividend would be made at that time.

The company said its group net debt was expected to be about $7m following careful working capital management and the $207m capital raise in 2020.

Online now represents 13.0 per cent of Kathmandu's direct-to-consumer sales, up from 8.9 per cent last year.

During the half, trade at a number of the group's stores continued to be disrupted by Covid-19.

Greater Melbourne stores were closed for over 11 weeks during the second lockdown, and 14 Auckland stores were closed for over two weeks.

Trading in Greater Sydney was affected over the Christmas period by the Northern Beaches outbreak.

Airport stores in Australia as well as Rip Curl stores in Hawaii, Bali and Europe are still impacted adversely by either Covid-19 related travel restrictions or government-mandated lockdowns and closures.

Outgoing chief executive Xavier Simonet said Rip Curl's record first half performance highlighted the strength of its brand.

Forward orders for the Rip Curl wholesale business were running at above pre-Covid-19 levels, he said.

Kathmandu said there had been robust sales growth in camping categories, with renewed interest in local travel and adventure activities within Australia and New Zealand.

However, its performance was heavily impacted by low demand for insulation and rainwear resulting from the lack of international travelers to the Northern Hemisphere.

Kathmandu's profit has historically been heavily weighted to the second half year, when winter in Australasia drives demand for insulation and rainwear.

The Kathmandu board said it had initiated a search process for Simonet's replacement.

In the meantime, Simonet continues to work through his six-month notice period.

Kathmandu bought Rip Curl, an Australian surf brand and action sports company, for A$350 million late in 2019.

The company's shares last traded at $1.30, having dropped by 47 per cent over the past 12 months.