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

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news