Warehouse Group, New Zealand's largest retailer, expects trading conditions to remain difficult in the short term.
Its chairman Keith Smith, told today's annual general meeting the company is optimistic about the New Zealand economy in the medium and longer term, and that it anticipates continued inflationary pressure on product andoperating costs.
"We will continue to pursue offsets to these through our cost reduction and productivity initiatives," Smith said.
He said key growth areas for Warehouse in the year to the end of September were health and beauty, sport and jewellery. Warehouse Stationery achieved a significant turnaround in sales as well, Smith said.
The business produced a 2.4 per cent drop in net profit to $83.2 million in the last financial year.
"In light of the global financial crisis, financing the business was an important area of focus in the past year," he said. "In issuing a senior fixed rate bond during the year, we were able to achieve diversification in sources of funding and to increase tenor in line with our long term capital investment intentions.
"The company's board has also decided to increase its dividend policy, given its ability to continue generating solid operating cashflow, Smith said.
This has been increased to 90 per cent from 75 per cent of adjusted net profit, which this year will total 24 cents a share.Smith noted that over the past five years, the total dividend return to shareholders has been 151 cents a share.
