Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Warehouse warns 1H earnings to fall by up to 13 percent

Warehouse warns 1H earnings to fall by up to 13 percent

By Paul McBeth

Jan. 23 (BusinessDesk) – Budget retailer Warehouse Group is warning its first-half profit will fall by as much as 13 percent after strong Christmas sales failed to compensate for a margin squeeze in the first quarter, higher funding costs, and reduced rental income.

Adjusted net profit will be between $46 million and $48 million in the first six months of the retailer’s financial year, to January, from $52.9 million a year earlier, the company said in a statement. Half of the reduction in first-half earnings was due to increased funding costs as the company reshapes its business and from a reduction in rental income, it said.

Total sales at the retailer’s ‘Red Sheds’ brand rose 5 percent from last year’s $1.59 billion in the period, with a recovery in gross profit margins in the second quarter after they shrank in the first quarter.

“We are pleased with how all of our retail brands traded over the critical Christmas period and the trading profit (the profit delivered by our retail businesses) is likely to be down only 1 to 2 percent in the half, recovering much of the ground lost in the first quarter,” chief executive Mark Powell said. “This reflects the progress we are making as we reshape the group, in a retail market that is undergoing significant change.”

Warehouse, which this month bought the Schooltex school uniform brand for $9 million, signalled the downgrade at last November’s annual meeting, blaming the first-quarter margin squeeze and the company’s investment in new acquisitions and expanded online presence.

The retailer said it will provide full-year guidance when it announces the first-half result on March 7, and expects the improvements in the second quarter will continue to flow into the second six months of the financial year. The company has previously indicated annual adjusted profit will beat last year’s $73.7 million.

The shares fell 1.1 percent to $3.72 in trading yesterday, and have gained 17 percent over the past year. The stock is rated an average ‘hold’ based on seven analyst recommendations compiled by Reuters, with a median price target of $3.75.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Ruataniwha: Greenpeace Launches Legal Challenge Against $1b Dam Plan

Greenpeace NZ is launching a legal challenge against a controversial plan to build a dam that’s set to cost close to $1 billion and will pollute a region’s rivers. More>>

ALSO:

Inequality: Top 10% Of Housholds Have Half Of Total Net Worth

The average New Zealand household was worth $289,000 in the year to June 2015, Statistics New Zealand said today. However wealth was not evenly distributed, with the top 10 percent accounting for around half of total wealth. In contrast, the bottom 40 percent held 3 percent of total wealth. More>>

ALSO:

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news