Pumpkin Patch reports 16 per cent rise in profit

Children's clothing retailer Pumpkin Patch has announced a 16.2 per cent rise in net profit for the half year ended January 31 to $14.6 million.

Earnings before interest and tax was up 13.4 per cent on the previous year, to $21.6 million.

An interim dividend of 4.25 per cent was declared, up from 3.75cps.

Group operating revenue increased rose 8.6 per cent to $151m, with sales growth in all segments.

New Zealand retail sales rose 2.7 per cent on the previous year, to $30.1m.

The company said that the broader retail market in New Zealand had slowed due to falling consumer confidence and increasing interest rates and petrol prices.

"Although the Pumpkin Patch brand holds a very strong position in the market, the company could not escape the impact off this general overall slowdown."

Earnings before interest and tax in New Zealand rose 14.1 per cent to $5.8 million.

Australian retail stores posted a 4.8 per cent increase in sales in Australian dollar terms, to A$73.8m. In New Zealand dollar terms terms sales were $80.8m, or 0.7 per cent.

Pumpkin Patch said the high kiwi dollar negatively impacted the translation of the Australian result into New Zealand dollars, with the average effective exchange rate for the period A91.39c, compared to A87.81c last year.

The Australian retail market was also affected by a slump in consumer spending,

But earnings before interest and tax for Pumpkin Patch's Australian operations was up 0.6 per cent to $15.8m.

The company is expecting flat trading conditions in New Zealand and Australia or the rest of the financial year.

Turnover in Britain for the period was up 53.8 per cent at £7.8 million ($20.3 million).

Some of the sales growth came from six new stores opened during the past 12 months.

British ebit for the period jumped 123.7 per cent, to $1.2 million.

The company also grew its presence in the United States, opening two new stores and bringing its total stores in the US to three.

Pumpkin Patch said the stores had exceeded expectations, and so far the customer response to the brand in the US had been pleasing.

The company plans to open another five US stores this financial year, and five in the first half of the 2007 financial year.

In the six months to January the US division generated sales of US$1.6 million ($2.4 million) and an ebit loss of $200,000. The result included the cost of opening the two new stores.

Shares in Pumpkin Patch fell 3c to $3.31 in early trading today, having ranged between $2.35 and $3.64 over the past year.

- NZPA