The Warehouse Group has posted a 73.9 per cent drop in annual net profit after tax year-on-year after big one-off costs hit the business.
The retailer reported non-adjusted net after-tax profit figure was $20.4 million in 2017 compared to $78.3m in 2016, down 73.9 per cent. Adjusted net profitafter tax was $59.2m, down 7.7 per cent compared to $64.1m last year.
The NZX-listed business said it had big one-off costs in the year to July 30, 2017 with the sale of financial services and the cost of restructure.
The costs were offset by the sale of a Newmarket property.
Chris Wilkinson of First Retail Group said the big slide from $82m to $20.7m showed The Warehouse is "right-sizing its business rapidly in the face of impending change and consumer behaviour which is very logical."
"They needed to make very cathartic decisions around the business. That was necessary. The speed of it was necessary. That's reflected in the final number."
Joan Withers, group chairwoman said: "The sale of financial services and the Newmarket property has improved our balance sheet and ability to fund our strategy over the next two to three years. We have made significant headway in transforming the business over the last year and the board is pleased to maintain a dividend pay-out to shareholders in line with previous years."
As it prepares for the Amazon juggernaut to hit Australia, the business which owns the red sheds and a variety of other retailing operations said it had had a strong second half.
Group chief executive Nick Grayston said: "It is encouraging that our second half retail performance delivered 13.9 per cent growth in adjusted net profit after tax despite the internal distractions during this period of transition. The next year will see exciting progress with our digital strategies as we position the business to compete successfully in the rapidly changing retail environment."
The business said for the full year Noel Leeming and Warehouse Stationery recorded strong growth in operating profit of 59.9 per cent and 10.2 per cent respectively, whilst The Warehouse and Torpedo7 reported declines of 5.4 per cent and 20.9 per cent.
The company made $2.98b revenue compared to $2.92b last year. Operating profit was $107.8m compared to $111.1m. A final dividend of 6 cents a share will be paid.
The Warehouse was established in 1982 by Stephen Tindall, initially selling imported and manufactured clearance lines at Takapuna, Auckland but is now one of the country's largest general merchandise retailers, also owning The Warehouse Stationery chain.
It was listed in November 1994 following a public issue of 23.6 million ordinary shares at $2.50. In 2013, it bought Noel Leeming, Torpedo 7, No 1 Fitness, Shotgun Supplements, Shop HQ and Insight Traders.
