Unfavourable NZ Customs ruling weighs on earnings for PAS Group

PAS Group managing director Eric Morris says subdued consumer sentiment continues.

Australia's PAS Group, whose suite of retail brands include Review, Black Pepper and JETS, says first-half earnings will be weighed down by a New Zealand Customs decision that didn't go its way last year.

In 2016, the Mt Waverly, Victoria-based retailer won a $1.08 million refund from overpaying duty on Black Pepper products imported into New Zealand between 2005 and 2010. However, last year a decision on the level of interest accrued from the overpayments didn't go as far as PAS had anticipated, a spokeswoman said. That meant the retailer had to reverse the proportion of interest it had expected but didn't receive.

This contributed to A$1 million of one-off costs in the six months ended Dec. 31 alongside costs related to a takeover bid for PAS from cornerstone shareholder US-based Coliseum Capital Management and consulting fees on US expansion opportunities for the retailer.

PAS expects first-half earnings before interest, tax, depreciation and amortisation to be between A$8 million and A$8.5 million after the one-off charges, down from A$11.6 million a year earlier.

"Ongoing subdued consumer sentiment, industry-wide traffic headwinds and the elevated promotional environment flagged in our August results announcement have continued," managing director Eric Morris said in a statement to the ASX yesterday. "Like for like store sales in Review and Black Pepper, which were below the prior year for the first eight weeks of the half, have continued to be below prior year and the prevailing environment has also resulted in delays to wholesale orders in Designworks."

PAS shares fell 2.4 percent to 40 Australian cents on the ASX yesterday.

(BusinessDesk)


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Huh? The wond $1.08m refund yet they wrote off A$1m as they expected this to be the amout of interest they would have received.
When did $1.08m (which included interest I think) give a further A$1m interest over 5 years.
The business seems to have used this mistake to write off a few more dollars thinking here is a chance we will blame in on NZ.
Seems like a bit of creative accounting?

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