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Pumpkin Patch shares have hit near 2 1/2 year lows, as management warned that sales in Britain remained soft and the US retail environment was softening.
At the same time the company remained committed to expanding in the two markets.
In a generally falling market, Pumpkin Patch shares
were down as much as 23c at one stage yesterday to $2.65, having been at $4.95 in January. They closed down 16c at $2.72.
Chief executive Maurice Prendergast said increased interest charges, store opening costs and market development costs in the US and Britain would continue to have an impact on Pumpkin Patch's short-term results.
He told yesterday's annual meeting of shareholders that was the cost of developing a global brand, and he was confident strategies being followed would deliver long-term shareholder value.
For the financial year which started in August, Pumpkin Patch expected to trade strongly in this country and Australia, Prendergast said.
In Britain, the soft retail environment that prevailed for much of 2007 had carried across to the 2008 year, accentuated by a late start to winter which led to a delay in normal winter trading patterns.
The company would be opening five new British stores in the current year - one of which had already opened with another two opening in the next fortnight, he said.
In the United States, older stores continued to to perform well but a definite softening in the general retail environment had been noticed.
Pumpkin Patch sold more units on average to each customer who visited its US stores than it did in other markets, Prendergast said.
The company planned to open at least 16 US stores this financial year, 10 of which were already open. New sites were also being identified for 2009 and beyond.
In Australia, Pumpkin Patch planned to open at least six stores this financial year, two of them already opened. In this country at least one new store was planned.
For the year to July, Pumpkin Patch posted a 3.2 per cent decline in net profit to $27.6 million after tax, on revenue up 17.9 per cent to $365.7 million.
Prendergast said Pumpkin Patch's international operations continued to reduce its exposure to any one economic downturn.
Although Australia was still by far the company's biggest market contributing almost 50 per cent of sales, Britain was close to New Zealand.
"This highlights the fact that we are no longer a New Zealand or even Australasian retailer," he said.
Executive chairman Greg Muir said that as in past years, the company would not be giving any guidance at yesterday's meeting on its half year result, as it was just entering the important trading period in November and December.
- NZPA
