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

 

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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