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Positive Pacific Retail Group Result

Improved Margins Underpin Positive Pacific Retail Group Result

AUCKLAND, 14 June 2000 – Pacific Retail Group (NZSE: PRG) today announced a profit of $15.47 million before tax and abnormals for the twelve month period to 31 March 2000, up 69% from $9.14 million on the previous year.

Profit after tax, abnormals and share of equity earnings was $7.70 million, compared to a loss of $0.81 million for the year ended 31 March 1999.
Revenues from the Group’s operating units, Noel Leeming, Bond & Bond, Computer City and Pacific Retail Finance, were $362.43 million, up 7.2% on $338.10 million.

Pacific Retail Chairman, Maurice Kidd said the positive result was underpinned by a number of improvement initiatives that had lifted the Group’s overall performance.

“By focusing attention on getting the fundamentals right across the operational spectrum: marketing, merchandising, staffing, logistics and management – we have significantly improved our ability to deliver stronger gross margin. It is in this context that we have managed to grow our market share. This result, and the way that it has been achieved, are squarely in line with the strategy of majority shareholder, Cullen Investments, to identify and take positions in market sectors that provide the products and services that tomorrow’s consumers, in growing numbers, will demand.

Executive Director and CEO, Stefan Preston said while the current economic climate tempered the Group’s expectations going forward, the result demonstrated its ability to achieve sustainable growth in operating revenue and deliver it smoothly through to the bottom line.

“The new management team has focused on ensuring that we become less vulnerable to external conditions beyond our control. We have done this by continuing to improve our operating performance, particularly in those areas where there is a directly positive influence on results.”

In the last nine months Preston said the Group had assumed greater control of telecommunications and head office expenses, rationalised logistics through stock system integration, improved levels of aged stock, introduced an internal marketing team, enhanced merchandising and executed more profitable targeted promotions.

“Our marketing focus over the last nine months has been on making exclusive, targeted offers that deliver what the customer wants rather than what the supply chain is pushing. This approach has not only increased our business but allowed us to improve margin retention.”

Going forward Preston said the Group will build on these improvements by focusing on costs and enhancing its products and the capability of its people. “Each of our businesses has set operational improvement goals for the coming year and we believe that through a combination of strong management, a streamlined infrastructure and leading brands we will continue to bring greater value to our customers and shareholders.”

Company Background
Pacific Retail Group is an NZSE-listed retail company. The appliance, electronics and computer retailer has 90 stores and sales of over $360 million, trading through its Noel Leeming, Bond & Bond, Computer City and Pacific Retail Finance brands.

ENDS

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