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

 

Maritime: Navigation Safety Review Raises Big Issues For The Govt

Shipping Federation: "The reports makes it clear that the ratification of the Maritime Labour convention (MLC) is long overdue. Only when the MLC is ratified will Maritime NZ be able to inspect and enforce the labour conditions on international ships visiting our ports." More>>

ALSO:

100 Years After Einstein Prediction: Gravitational Waves Found

For the first time, scientists have observed ripples in the fabric of spacetime called gravitational waves, arriving at the earth from a cataclysmic event in the distant universe. This confirms a major prediction of Albert Einstein’s 1915 general theory of relativity and opens an unprecedented new window onto the cosmos. More>>

ALSO:

Farming: Alliance Plans To Start Docking Farmer Payments

Alliance Group, New Zealand's second-largest meat cooperative, plans to start withholding some stock payments to its farmers from next week to bolster its balance sheet and force suppliers to meet their share requirements. More>>

ALSO:

Gambling: SkyCity First Half Profit Rises 30%, Helped By High Rollers

SkyCity anticipates the Auckland business will benefit from government gaming concessions which were triggered on Nov. 11 in recognition of SkyCity’s $470 million Convention Centre development. Morrison said the concessions would allow the Auckland business to lift its activity during peak period, noting it had a record revenue week over the Christmas and New Year period. More>>

ALSO:

Money For Light: Kiwi Scientists Secure Preferential Access To Synchrotron

Science and Innovation Minister Steven Joyce today announced a three-year investment of $2.8 million in the Australian Synchrotron, the largest piece of scientific infrastructure in the Southern Hemisphere, to secure preferential access for Kiwi scientists. More>>

Telco Industry Report: Investment Hits $1.7 Bln A Year

Investment in the telecommunications sector is $1.7 billion a year, proportionately one of the highest levels in the OECD, according to a report released today on the status of the New Zealand sector. More>>

ALSO:

PGPs: New Programme Sets Sights On Strong Wool

A new collaboration between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries (MPI), announced today, aims to deliver premiums for New Zealand's strong wool sector... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news