KEY POINTS:
Retailer The Warehouse has reported a first half operating profit after tax of $61 million, following its loss of $8 million in the same period a year ago.
Group chief executive Ian Morrice said continued development of its merchandise range, including the addition of brands such as Wiltshire kitchenware, RCA televisions and Levene paint, had contributed to an increase in customer visits and the amount customers spent.
Store format development continued, with one new replacement store opened, two stores refitted and the Whangarei store converted to a Warehouse Extra.
"The conversion of our Whangarei store to the Extra format will serve as a model for the format. Customer reaction in Whangarei has been excellent," Mr Morrice said.
The third Warehouse Extra store would be Te Rapa, north of Hamilton, and was scheduled for opening before the end of calendar year 2007.
Last year's result included one-off costs of $87.8 million associated with the sale of The Warehouse's Australian chain.
The company said today that when adjusted for the Australian divestment, operating profit for the six months to January 28 was up 3.1 per cent. Sales were up 2 per cent to $951.7m.
The Warehouse New Zealand posted a 3.4 per cent higher operating profit of $95.2m. Overall sales were up 2.2 per cent to $849.7m, with same store sales up 0.9 per cent.
For Warehouse Stationery sales at $101.3m were up 1.1 per cent, with same store sales up 1.9 per cent. Operating profit was up 9.1 per cent to $3.5m.
Mr Morrice said retail conditions were expected to remain challenging for the balance of the year, especially in the light of the increase in the Official Cash Rate yesterday.
But trading conditions since January had been firm and company directors were comfortable with the market consensus forecast for a full year profit of around $96m.
The interim dividend was set at 12 cents per share, up 1.5c from last year.
The Warehouse Group had continuing sales of $1.72 billion and an after tax profit of $96.9m for the year ended July 30, 2006 after adjusting for the loss on the disposal of its Australian assets.
The group includes 85 Warehouse New Zealand stores and 43 Warehouse Stationery stores, and directly employs more than 8000 people in this country.
The Christmas season at The Warehouse New Zealand was the best in three years but still below expectations, the company said.
Good sales were seen from dry grocery, confectionery, home decor, health & beauty and homewares but were disappointing for apparel and outdoor furniture.
- NZPA
