HALFYR: WHS: The Warehouse Group 2010 Interim Results Announcement

12 Mar 2010 8:30 am

WHS 12/03/2010 HALFYR

REL: 0830 HRS The Warehouse Group Limited

HALFYR: WHS: The Warehouse Group 2010 Interim Results Announcement

THE WAREHOUSE GROUP LIMITED

Reporting Period: 3 August 2009 to 31 January 2010 Previous Reporting Period: 28 July 2008 to 25 January 2009

CONSOLIDATED OPERATING STATEMENT 2010 Half Year Performance

REVENUE $918.916 million versus $923.490 million in 2009, a decrease of 0.50 %

OPERATING PROFIT $83.222 million versus $84.246 million in 2009, a decrease of 1.2 %

EARNINGS BEFORE INTEREST AND TAX $85.337 million versus $74.503 million in 2009, an increase of 14.5 %

PROFIT BEFORE TAX $81.926 million versus $69.610 million in 2009, an increase of 17.7 %

PROFIT ATTRIBUTABLE TO PARENT SHAREHOLDERS $57.430 million versus $48.968 million in 2009, an increase of 17.3 %

EARNINGS PER SHARE 18.6 cents per share versus 15.9 cents per share in 2009, an increase of 17.0 %

Interim Dividend: 17.0 cps Record Date: 19 March 2010 Date Payable: 30 March 2010

Tax credits on interim dividend: Fully imputed for New Zealand residents; Supplementary dividend payable to non-residents.

ENDS

MEDIA RELEASE

THE WAREHOUSE ANNOUNCES INTERIM RESULTS

Net Profit After Tax Maintained Interim Dividend Increased

Auckland, 12 March 2010 - The board of The Warehouse Group today announced reported net profit after tax for the half year of $57.4 million compared to $49.0 million in the prior comparable period. Last year's first half profit included a $7.4 million post tax charge relating to the exit from fresh food and liquor.

Adjusted net profit after tax for the half year ended 31 January 2010 was $57.0 million compared to adjusted net profit of $56.8 million last year, excluding unusual items.

Group sales for the half year were $918.9 million, down 0.5% on the prior comparable period. After adjusting for discontinued activities, sales were up 0.7%. Last year's first half sales included $11.3 million attributable to discontinued fresh food and liquor.

The Directors have declared an interim dividend of 17.0 cents per share, which includes an increase of 1.5 cents per share compared to the 2009 interim dividend in order to distribute the balance of imputation credits available at 33 cents.

In announcing the result, Chairman Keith Smith says, "The group continues to deliver consistent earnings compared to the first half of 2009 which was a strong result in the recession."

The Warehouse reported sales of $821.0 million, flat compared to last year after adjusting for discontinued activities. After adjusting for F09's 53rd week same store sales for the half year were down 1.2% with second quarter sales down 1.1%.

Operating profit for the half year was down 3.2% to $78.7 million.

Commenting on The Warehouse result Group Chief Executive Officer, Ian Morrice says, "The recovery in overall retail spending remains patchy with some specialist sectors seeing quite a bounce-back from the recessionary levels of 2008/9. Department stores as a sector has not seen the lifts experienced by softgoods, clothing and appliance specialists in the second six months of 2009. The Warehouse' sales performance reflects this"

Mr Morrice also commented, "Our strong overall margin performance achieved in the first half of the 2009 financial year has been maintained, although having planned for increased sales which didn't eventuate, we have needed to clear more seasonal inventory than the same period last year impacting gross margins. We are pleased with the progress we are continuing to make on a number of our growth initiatives but these gains are not yet sufficient to offset the exit from fresh food and liquor and sales shortfalls in other areas."

Warehouse Stationery reported sales of $96.2 million up 8.7% compared to last year. After adjusting for F09's 53rd week same store sales for the half year were up 7.2% with second quarter same store sales up 10.2%.

Operating profit was up 139.8% to $3.0 million.

Mr Morrice says, "We are very pleased with the overall performance improvement in Warehouse Stationery over this first half. This reflects a very focused approach to trading with customer visits increasing and sales recovery being achieved across most categories. We expect sales to recover to levels at least equal to the 2008 financial year having experienced such a significant drop in consumer spending in 2009".

Subject to any material change in expected trading conditions, the Directors expect adjusted net profit after tax for the full year to be similar to adjusted NPAT for F09.

Dividends will be paid on 30 March 2010 with the record date being 19 March 2010.

ENDS

Background: The Warehouse Group Limited

The Warehouse Group Limited comprises 86 Warehouse stores and 47 Warehouse Stationery stores in New Zealand. The company has a turnover of $1.7 billion and employs over 7,000 people.

Contact details regarding this announcement:

Investors and Analysts Luke Bunt Chief Financial Officer Telephone: +64 21 644 882

Media Ian Morrice, Group CEO to be contacted via Wendy Irving on +64 9 488 3231 End CA:00192381 For:WHS Type:HALFYR Time:2010-03-12:08:30:17

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