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Mitre 10 (NZ) posts profit as sales rise in competitive DIY retailing market

Tuesday 30th December 2014

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Mitre 10 (New Zealand), the cooperative that services the Mitre 10 hardware chain, turned to a full-year profit, saying it is holding its own in the DIY market where it competes with the Bunnings and Placemakers stores.

Profit was $1.4 million in the year ended June 30, from a loss of $2.89 million a year earlier, according to the Auckland-based company's annual report. Sales rose to $675 million from $591 million. Revenue doesn't include actual sales at the 83 stores owned by its shareholders, which gained about 10 percent to $1.04 billion in the year.

The company declared dividends of $1.36 million, unchanged from a year earlier.

Mitre 10 NZ was created in 1974 by owner-operators of hardware stores, from a concept that originated in Australia in the 1950s. The local business took full control of the brands in New Zealand in 2010 after 50.1 percent of Mitre 10 Australia was sold to Metcash Trading, which took its ownership to 100 percent in 2012. The 10 biggest shareholders of Mitre 10 (New Zealand) own about 70 percent of the company, according to the Companies Office.

"We're very happy with the company performance across the board," said chief executive Neil Cowie. "It is in line with the sector, which is travelling reasonably well in a competitive environment."

He said trading so far in the current year "is continuing to tack in the same vein."

The company's Mega format is now almost a decade old and there are 38 of the super-stores in New Zealand. Cowie said the local market has room for about 44 Mega stores, including "a couple of new sites and a couple that could merge." It currently has consents lodged for a Mega store in Queenstown, which would replace an existing Mitre 10 outlet.

The annual accounts recognise a $4.7 million impairment loss, which it said reflected a weaker than expected performance from some stores owned by the group after a review of the recoverable value of the stores' property, plant and equipment.

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