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


Pumpkin Patch 1H profit slides 98% on poor Australia trading

Pumpkin Patch 1H profit slides 98% on poor Australia sales, disrupted supply, high kiwi

By Suze Metherell

March 19 (BusinessDesk) – Pumpkin Patch said first-half earnings plunged 98 percent as competition in Australia and New Zealand forced the children’s clothing retailer to discount prices to stem a decline in sales, while contending with supply chain disruptions and a high kiwi dollar.

Net profit was $106,000 for the six months ended Jan. 31, sliding from $4.7 million in the same period a year earlier, the Auckland-based company said in a statement. Overall revenue tumbled 17 percent to $128 million, driven by a 19 percent decline in Australian sales, its largest market, and the impact of the high New Zealand dollar against the Australian dollar.

Chief executive Di Humphries was downbeat about the immediately outlook, saying trading would “remain challenging” as it spent more on promotions and contended with a strong currency. The company expected there to be a more “downside risk than upside potential for earnings” for the remainder of the year, she said, without being specific.

The shares dropped 13 percent to 59 cents, near the lowest in more than two years, and have fallen 51 percent over the past 12 months.

Last November the company told shareholders at their annual meeting that sales in the first four months of the year were “materially impacted” by the August Australian federal election, while New Zealand’s trading conditions remained challenging with heavy discounting. Pumpkin Patch also suffered disruptions to its supply chain after two suppliers failed and major flooding in China left inventory short ahead of Christmas.

New Zealand sales fell 14 percent to $24.1 million and international sales declined 4 percent to $20.9 million, which the company said reflected soft conditions in Ireland.

Sales through its international websites rose 34 percent, it said without giving details. Online sales in Australasia were affected by the supply chain disruptions. Online sales are greater than the retailer garners from its New Zealand stores.

“While heavy discounting continues in the Australian and New Zealand markets, Pumpkin Patch is seen as premium brand internationally,” Humphries said. “Given some of the international relationships we are developing and the opportunities that are out there for us, I expect to see some decent earnings growth from our international business unit over the next few years.”

The company has gone through a period of reorganisation, reviewing operational and central support costs. Net profit before recognising those reorganisation costs, which includes losses from discontinued operations, was $1.3 million, down from $6.5 million in the previous comparable period.


© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news