Postie Plus profit up 135 per cent

Clothing retailer Postie Plus Group has reported a full year net profit after tax up 135 per cent to $3.93 million.

The result came in a year which saw "erratic" consumer spending, with a soft patch in early winter but a robust increase in July quarter sales, the Christchurch-based company said today.

Chairman Peter van Rij said the 2006 result was achieved against generally weaker trading in retailing and a credit to staff in the group's 116 stores around the country .

The company said an earlier reported 23 per cent surge in July quarter sales to $38.2 million lifted sales for the year to July 31 by 9.8 per cent to $125.51 million.

Net profit before tax was $5.84m from $2.56m the previous year, while earnings per share improved to 9.81 cents per share from 4.17cps in 2005.

A fully imputed final dividend of 4cps was declared, on top of an interim dividend of 3cps, taking the total dividend for the year is 7cps, compared with 3cps last year.

The group operates the Postie+, Arbuckles and Baby City retail brands.

"The result is all the more remarkable considering the aberration of trading in the month of April which was adversely affected by abruptly lower consumer demand," Mr van Rij said.

"As it has played out, our fears were completely allayed by a robust increase in fourth quarter sales that proved to be much more than a return to normal trading patterns."

Chief executive Ron Boskell said consumers were hit during the year by rising household costs for mortgage repayments, electricity, rates, food and a huge 55 per cent leap in fuel costs.

"In those circumstances, only the country's historically low levels of unemployment has kept consumer confidence from faltering.

"Our 2006 result is absolute endorsement of the attractiveness of our value-for-money proposition. Quality products for middle New Zealanders at fair prices," Mr Boskell said.

While achieving a sales gain of 10 per cent, the company had kept its inventory level unchanged, but considerably fresher than in the past.

It was now opening each season with minimal carry over from the previous corresponding season, enabling the company to protect gross margin in a competitive market.

Capital expenditure for the year was $2.6m, from $4.8m, while nine new stores were opened during the year, with a further five opened since the balance date.

Since then it had also appointed advertising agency Young & Rubicam, and launched the "Who's Henri?" apparel brand which would be rolled out in further store openings after a trial at Rotorua.

Mr van Rij said Postie Plus would continue with a growth strategy throughout the business.

"Brand development is strategic to our growth and new developments will be implemented over coming months."

Postie Plus shares were first traded three years ago, with the $1 shares getting as high as $1.37 on the first day of trading.

At the start of this year they were only around half that level, but have moved steadily upwards since then and closed yesterday at 91c. By late-morning no shares had changed hands today.

- NZPA