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Pumpkin Patch reports $26.7m loss after US store closures

Auckland based children's clothing specialist retailers Pumpkin Patch this morning announced a net loss of $26.74 million after accounting for impairments and one-off costs from closing stores in the US.

Net profit after tax including the US stores and non-recurring items was down 13.9% at $14.7 million, but US store closures led to impairments and one-off costs of $39.9 million.

Total one off items after tax were $41.45 million.

The company announced a dividend payment of 4.5 cents per share, compared with 3.5 cents in 2008.

The result, slightly better than analysts forecasted, came off the back of extreme retail volativity in the US and UK.

In New Zealand, sales were down marginally at 1.9% after increased promotion in 2009 and four outlet stores opened since the beginning of 2008.

Australian sales fared better in a soft retail market, with trade up 2.5% on 2008.

The company reduced net bank debt by 77% to $18 million, with around $36 million of mark to market gains resulting in immediate debt reduction following a change in the company's foreign exchange portfolio towards the end of 2008.

International Financial Reporting Standards (IFRS) require the realised gains to be held in reserves and taken to earnings in the period that the original foreign currency contract was due to mature.

Stocks were reduced by 34% or $41.6 million.

The company expected the 2010 year to be difficult, but said it was well positioned to take advantage of new opportunities as the retail market improved.

Pumpkin Patch (PPL) shares were last trading at NZ$2.02.

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