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

 


UPDATED: Pumpkin Patch shares sink to record-low

UPDATED: Pumpkin Patch shares sink to record-low as 1H earnings plunge 98%

(Updates share price, adds company comment throughout)

By Suze Metherell

March 19 (BusinessDesk) – Shares in Pumpkin Patch plunged to a record-low after the children’s clothing chain reported a slump in first-half earnings and anticipates a strong currency may lean on profit for the rest of the year.

The stock sank 19 percent to 55 cents, valuing the retailer at $115 million, after the company reported a 98 percent drop in first-half profit to $106,000 in the six months ended Jan. 31. Revenue declined 17 percent to $128 million as two failed suppliers and major flooding in China disrupted its supply chain, leaving inventory short ahead of the Christmas trading period.

“The results on the table are terrible for our shareholders. There is massive potential, it just needs to be unleashed,” chief executive Di Humphries told an analyst briefing. “The most disappointing thing about these results is that we had done so much work and there is still more to do, but we are repositioning this business.”

Chief financial officer Matthew Washington said the impact of New Zealand’s strong currency against its Australian counterpart may have a bigger impact on earnings as the financial year unfolds, and risks in the second half are skewed to the downside.

Sales in Australia, the company’s biggest market, tumbled 19 percent in the half. The kiwi dollar was recently at 94.37 Australian cents, and has gained 12 percent since July last year.

“There is more risk on the downside than the upside in the short term,” Washington said. “That’s purely because of what we’re just seeing, or not seeing, coming out of Australia in particular, and also with that exchange rate there are a few headwinds in the latter part of the second half. “

Pumpkin Patch has gone through a period of reorganisation, reviewing operational and central support costs. Profit before those reorganisation costs, which includes losses from discontinued operations, was $1.3 million in the half, down from $6.5 million in the previous comparable period.

New Zealand sales fell 14 percent to $24.1 million and international sales declined 4 percent to $20.9 million.

Sales through its international websites rose 34 percent, it said without giving details. Online sales in Australasia were affected by the supply chain disruptions.

Humphries said consumers are still interested in the company, and that Pumpkin Patch is seeking to boost profitability by latching on to areas of growth in the retail sector.

“We can see where the strengths in online are and then really shifting the business model as to where we need it to go to go forward,” Humphries said.

The company anticipates announcing new partnerships in the coming months, without providing any detail.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Post-Post: Brian Roche To Step Down As NZ Post CEO

Brian Roche will step down as chief executive of New Zealand Post in April 2017, having led the state-owned postal service's drive to adjust to shrinking mail volumes with a combination of cost cuts, asset sales, modernisation and expansion of new businesses. More>>

ALSO:

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news