Pacific Retail reports half year loss

Pacific Retail Group (PRG) today announced a $35.9 million net loss for the half year to September, compared to a net profit of $55.4 million for the same period last year.

PRG said the previous September half year profit included earnings from its New Zealand appliance and furniture business, as well as a $86.7 million gain from the sale of that business. Noel Leeming, Bond & Bond, Big Byte and Noel Leeming Furniture were sold in August 2004.

Gross revenue across PRG fell to $314.4 million, from $539.8 million. The difference was largely due to the sale of the appliance and retail business, which contributed $167.8 million gross revenue in previous September half year.

The British-based Powerhouse again failed to break even, posting a net operating loss of $35 million, compared to a net loss of $42.7 million for the same time last year.

Powerhouse's gross operating revenue fell to $188.8 million from $267.6 million, which the company said was due to foreign exchange impacts, as well as the closure of a number of loss making stores.

Earlier this month PRG has announced a conditional deal to sell its Finance Group -- which comprises Pacific Retail Services, Pacific Retail Finance, Montreal Financial Services, and Simply Insurance New Zealand -- to GE Finance and Insurance for $145 million. The deal is expected to be settled by December 31.

The Finance Group 's net profit before tax fell to $4.1 million, from $14.7 million. PRG said much of the fall was due to a change in accounting treatment on insurance premiums. If accounting treatments had not changed the net profit before tax would have been $12.5 million.

Bendon's gross operating revenue grew to $57.2 million from $48.4 million, but its earnings before interest, tax, and amortisation (ebita) fell to $358,000 from $1.8 million.

"Bendon continues to implement its export growth plans across a number of markets, with a consequent growth in the expense base resulting in a short-term profitability erosion," PRG said in statement. The company said this was in line with expectations and was expected to reverse in 2007.

The Elle Macpherson Intimates brand was launched into the North American market, while the Fayreform brand was launched in Britain in July.

The high New Zealand dollar and a slowing retail environment in key markets like Australia and Britain are likely to restrain Bendon's revenue growth in the short term.

"However, Bendon is well-positioned to compete in this environment with strong brands, innovative new products and a committed team to back them up," PRG said.

The homewares chain Living & Giving has been restructured, and posted ebita loss of $1 million for the half year, compared to a $2.3 million loss the previous September half. The $2.3 million loss included $1 miollion costs related to the closure of four stores.

Pacific Retail Properties (PRP) reported ebita of $352,000 for the half year, compared to an ebita loss of $217,000 in the comparable period. The company said the improvement was due to higher management services fees and the inclusion of rental income from completed projects.

- NZPA