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PRG Reports Increased Half Year Sales

Auckland, 14th December: Pacific Retail Group (PRG) Reports Increased Half Year Sales And Improved Operating Profit

Pacific Retail Group (PRG) today announced an operating profit of $7.5 million before tax and abnormals and an increase in half-year sales to $212.6 million for the half year to September 30, 2001. Sales were up from $198.4 million and operating profit was up from $6.1 million for the corresponding period last year.

“Appliance store redevelopment, better stock and supplier management, along with reduced costs through improved distribution and logistics, have contributed to this performance,” said Chief Executive, Peter Halkett. “These initiatives, alongside work previously undertaken to improve basic retail systems and structures, are now delivering sustainable Group profitability.

“The Group is now focussed on growth strategies, in a very competitive market, to develop the new brands in the portfolio, increase total retail space and implement new concepts like the contract manager scheme,” said Mr Halkett.

Consistent with past practice the board has decided against paying any interim dividend, preferring instead to retain funds for reinvestment in its growth and development strategies.

Noel Leeming/Computer City, Bond and Bond and the newly launched Big Byte stores comprise the Group’s appliance and computer retail brands. In this category sales growth was steady, and ahead of the 3% growth (Retail Trade Survey) the sector experienced.

“This was a positive performance given the fierce competition during the period, which saw many of our competitors attempting to drive volume through heavy discounting. We avoided this approach and it is pleasing that our increased profitability and market share proved that this focus upon profitable, sustainable growth was successful,” said Mr Halkett.

During the period, the Group launched its first Big Byte stores, a large format specialist computer and communications concept. The Group plans to grow the Big Byte chain to eight or ten stores nationwide.

Living & Giving, the Group’s gift and homeware retailer is in its expansion phase, with six new stores opening since April 2001. Living & Giving has focussed on improving infrastructure and management in preparation for a full national rollout. Mr Halkett says it is now well positioned for the critically important Christmas trading period.

Chairman Maurice Kidd said that the Group’s Finance Division provides a big opportunity for growth as it expands outside its core role of supplying hire purchase finance to the appliance division.

“From its currently strong and profitable base, Pacific Retail Finance is well placed to capitalise on the strategic growth opportunities emerging in the consumer finance sectors. By the end of this financial year the business will have substantially increased its range of products, and expanded its third party financing business,” he said.

Pacific Retail Finance’s first ranking secured debenture, which was launched in July 2001, had raised more than $13.2 million by November 30th 2001.

Ends

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