Mitre 10 annual profit slumps 92% on higher occupancy, land banking costs

Wednesday 4th November 2015

Mitre 10 (New Zealand), the cooperative that services the Mitre 10 hardware chain, reported a 92 percent slump in annual profit, as it spent more on land and rent for future stores.

Profit dropped to $106,000 in the year ended June 30, from $1.4 million a year earlier, according to its financial statements lodged with the Companies Office. Wholesale revenue rose 5 percent to $708.6 million. Revenue doesn't include actual sales at the stores owned by its shareholders, which rose 10 percent to $1.1 billion in the year ended June 30, it said in September. Distributions paid to cooperative members rose 17 percent to $67.2 million.

Chief executive Neil Cowie said the drop in profit was due to accounting adjustments and a 22 percent uplift in occupancy costs to $46.7 million, and noted the company is "land banking" for future stores.

The value of Mitre 10's land holdings rose to $24.4 million as at June 30 from $10 million a year earlier, while its portfolio of buildings were valued at $18.7 million at the 2015 balance date, down from $19.2 million in 2014. The fair value of its investment property portfolio was reduced by $1 million to $9.3 million in the year.

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.

BusinessDesk.co.nz

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