Postie Plus widens 1H drop as sales, margins dwindle

Postie Plus Group, which last year avoided breaching its banking covenants, is in talks with its banks again after posting a wider first-half on dwindling sales and thinner margins and bracing for an annual loss. The shares tumbled.

The Auckland-based company made a pre-tax loss from continuing operations of $2.56 million in six months ended February 3, compared to a loss of $924,000 a year earlier, it says in a statement. Sales fell 1.5 percent to $43.93 million and overall gross margins declined. The results will be announced on March 29.

Postie Plus expects a "substantial loss for FY2013" after its logistics and distribution service provider struggled to develop a new distribution centre, and will breach its banking covenants due to the loss of margin.

"The company has commenced discussions with its bank," it says. "PPGL is working intensively with the service provider to accelerate distribution performance and has also engaged independent expertise to assist in this process."

Postie Plus shares fell 13 percent to 21 cents on the NZX.

According to the company's latest annual report, it had secured bank loans of about $9.76 million as at August 5 at an average interest rate of 5.15 percent. Notes to the accounts show the company did not meet its interest to ebit ratio covenant of 1.5 times for the rolling 12 months to April 2012 though it was in compliance with proprietorship and liquidity covenants.

Last year Postie Plus outsourced its distribution systems and processes to a purpose-built centre in Mangere as part of its shift to Auckland, where it saw greater opportunities.

(BusinessDesk)


1 · Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

1 Comment & Question

Commenter icon key: Subscriber Verified

Either halve the pay of the board of directors or sell off this company once and for all....

Reply
Share
  • 0
  • 0

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6963 -0.0066 -0.94%
AUD 0.8908 -0.0017 -0.19%
EUR 0.5912 -0.0021 -0.35%
GBP 0.5280 -0.0065 -1.22%
HKD 5.4325 -0.0502 -0.92%
JPY 79.0240 -0.1890 -0.24%

Commods

Commodity Price Change Time
Gold Index 1288.1 8.850 2017-10-19T00:
Oil Brent 57.0 -0.900 2017-10-19T00:
Oil Nymex 51.5 -0.740 2017-10-19T00:
Silver Index 17.2 0.258 2017-10-19T00:

Indices

Symbol Open High Last %
NZX 50 8124.1 8142.3 8124.1 0.07%
NASDAQ 6633.4 6640.0 6605.1 0.36%
DAX 13057.8 13063.6 12990.1 0.01%
DJI 23205.2 23328.8 23163.0 0.71%
FTSE 7523.0 7560.0 7523.0 0.00%
HKSE 28360.0 28519.8 28159.1 1.17%
NI225 21391.0 21489.3 21448.5 0.04%
ASX 5896.1 5924.9 5896.1 0.17%