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Daily ShareChat: Kathmandu

By Jenny Ruth

Friday 26th March 2010

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 Jenny Ruth

Outdoor clothing retailer Kathmandu Holdings produced a "you little zipper" result from an operating viewpoint, says Sarndra Urlich, an analyst at First NZ Capital.

Its maiden result showed sales in the six months ended January 31 were up $27.5% to $106.6 million, EBITDA (earnings before interest, tax, depreciation and amortisation) was up 41.2% to $18.1 million and EBIT was up 49.6% to $15.6 million.

Urlich says both the Australian and New Zealand operations benefited from "a back-to-basic trend with the outdoor sector clearly outperforming most other retail sectors. The response to Kathmandu's promotional activity and its new refurbished stores has clearly been a key positive," she says.

Kathmandu is, sensibly, being cautious about the second half, given between 70% and 75% of its earnings come in the second half, "we believe there is every chance that it will exceed its prospectus forecasts," she says.

"If we were to assume the seasonal split as forecast in its prospectus (we already know the first half), we believe Kathmandu could report EBITDA in the order of $68.7 million , up 20.3% on prospectus forecasts," Urlich says, but adds this is probably optimistic. She is forecasting $63.8 million in EBITDA compared with the $57 million prospectus forecast.


BROKER CALL:  First NZ Capital rate Kathmandu Holdings as neutral.




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