Pumpkin Patch profit jumps 76pc

Pumpkin Patch's profit has risen despite a fall in its total revenue. Photo / NZ Herald

Pumpkin Patch yesterday reported a 76 per cent rise in full-year net profit to $25.5 million despite facing "subdued" market conditions.

The children's clothing company said although total revenue was $382 million, down 11 per cent, its focus on inventory, margin, and cost management initiatives and restructuring in the past two years delivered positive earnings in the year to July 31.

"While conditions in all markets are expected to remain challenging in the short-term the strength of the Pumpkin Patch brand will ensure the company benefits when trading conditions improve."

The company said it also improved earnings before interest and taxes (ebit) margins in its four retail markets - New Zealand, Australia, Britain and the United States.

In New Zealand, sales fell 6 per cent, excluding temporary clearance stores operating last year, as the retail environment remained subdued for much of the year. It expected trading conditions to stay the same in the short term.

Total ebit was up 2 per cent to $11.3 million.

In Australia, sales on New Zealand terms fell 3 per cent and ebit rose by 1 per cent to $38.7 million. In the US sales fell 16 per cent, hit by higher exchange rates, and ebit was $2.7 million.

In Britain sales rose 5 per cent in UK terms but fell 11 per cent in New Zealand terms due to "significantly" higher exchange rates. Ebit was a loss of $900,000.

Total wholesale sales fell 15 per cent to $53.2 million and ebit fell 17 per cent to $13.7 million.

The company has a total of 20 wholesale markets after establishing new partnerships with China, Lebanon, Malta and Thailand.

During the year Pumpkin Patch announced the launch of its new Charlie & Me brand, targeting the "everyday wear" segment of the market.

The first store opened after balance date, and the company expects to open at least seven stores next year - six in Australia and one in New Zealand.

"The launch of the Charlie & Me brand and the ongoing development of new wholesale markets is expected to open up a new phase of long-term growth for the company," Pumpkin Patch said.

"Add to this the growth opportunities the Pumpkin Patch brand already has in its existing retail markets and the company is well placed to deliver long-term rewards to shareholders."

The company has opened its first store in Ireland, and another was due to open next month.

Directors approved a final 5c per share dividend, taking the total dividend for the year to 9.5c per share, up 27 per cent compared with last year. It will be paid on October 21.

Pumpkin Patch shares closed at $1.96 last night.

- NZPA