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New Zealand’s largest listed retailer, The Warehouse Group, says its full-year net profit rose $12 million or 15%, boosted by a one-of gain from property sales, in a year in which sales grew by the most they have in eight years.
The retailer has revealed its net profit lept from $77.8 million to $89.8 million in the year to July 29.
But that figure recognised a $18.2 million gain from the sale of property and a further $7.3 million from the release of warranty provisions.
Profit before one-off items was $10.8 million or 14% lower at $65.2 million - meeting guidance given earlier this year.
Group sales were a strong feature of the result, rising $64.4 million, or 4%, to $1.7 billion – reversing many years of sales declines.
Shares in The Warehouse are trading at $2.9 on the NZX.
The final, fully tax paid dividend remains unchanged from last year at 6.5 cents per share, to be paid on November 14, bringing total ordinary dividends for the year to 20.0 cents per share
Chairman Graham Evans says although it is early days in The Warehouse’s turnaround strategy, positive momentum has been achieved and the retailer is looking forward to the earnings boost to continue in the year ahead.
“We expect the retail sector to continue to experience mixed trading conditions in 2013,” Mr Evans says in a statement to the NZX.
“Our earnings are significantly influenced by the Christmas trading performance over the critical January quarter, which means it is too early to provide specific earnings guidance at this stage.”
Trading conditions were expected to be mixed in the year ahead.
The group’s 89 flagship "red shed" stores achieved operating profit of $80.9 million for the year, down $17.9 million, or 18.1%, from the same time last year.
Chief executive Mark Powell says the lower result is consistent with the company’s strategic plan.
Reported total sales rose 4.2% to $1.5 billion, driven by sales of clothing, technology, jewellery, health and beauty, and baby care products.
“I am especially pleased by the momentum we have seen in the second half of the year and the positive reaction from our customers to our refitted stores,” Mr Powell says.
Same-store sales rose 3.8%.
The Warehouse’s online business grew 63%, he said
The group’s 56 Warehouse Stationery stores achieved an operating profit of $9.8 million for the year – down slightly on the $10.1 million achieved last year.
Sales rose $5.1 million, or 2.6%, to $206.6 million.
Same-store sales rose 3.3%.