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

 


Warehouse says FY earnings and dividends to fall

Warehouse says FY earnings and dividends to fall as it seeks $115M to expand financial services

By Tina Morrison

March 6 (BusinessDesk) – Warehouse Group expects full-year earnings to fall as it invests in financial services and buys rival retailers to diversify away from its mature ‘red shed’ discount stores where growth is limited.

Warehouse expects adjusted full-year profit of $67 million to $71 million, down from $73.7 million last year, the Auckland-based company said today. It posted a 13 percent drop in adjusted first half profit of $46.2 million today, at the bottom end of its $46 million to $48 million forecast.

Warehouse said today it plans to pay $3 million for the Diners Club New Zealand business to expand its range of financial services. The company is beefing up financial services as it seeks to diversify earnings away from its core discount barn stores, expanding its stationery stores, acquiring the Noel Leeming entertainment and technology chain and increasing its stake in the outdoor and adventure retailer Torpedo7 Group.

“We are in an ongoing process of reshaping The Warehouse Group, with each business at a different stage in its journey,” chairman Ted van Arkel said. “Opportunities such as financial services, which has arisen because of our strategy, are exciting and will provide material earnings to the group in the medium term.”

In order to invest in its business to drive future earnings, the company will cut its dividend payout ratio to between 75-85 percent of adjusted profit, from a previous policy of 90 percent of adjusted profit, it said. To provide certainty for shareholder, the policy will phased in over the next two years when a minimum dividend of 19 cents per share will be paid.

Shares in Warehouse are in a trading halt as the company seeks to raise $115 million to strengthen its capital base to support its financial services strategy. It plans to sell $100 million of shares at a 5 percent discount at $3.23 apiece to institutional shareholders today. It also plans to offer a $15 million share purchase plan to other New Zealand shareholders who hold shares at March 18.

Warehouse founder Stephen Tindall and his Tindall Foundation will participate in the equity raising to maintain existing stakes in the company.

The company’s financial services business is expected to lose as much as $3 million after tax in the 2014 and 2015 financial years as the business is developed, and contribute to earnings from the 2016 financial year, Warehouse said.

(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