Sharechat Logo

Pumpkin Patch returns to profit

Wednesday 22nd September 2010

Text too small?

Pumpkin Patch returned to profit after a renewed focus on inventory margin, costs cutting and restructuring helped the listed children’s wear retailer shrug off falling sales revenue.

The Auckland-based company reported net profit of $25.5 million in the 12 months ended July 31, from a loss of $26.7 million a year ago when it shut down 15 unprofitable stores in the US Revenue dropped 7.4% to $382.2 million as retailers continue to struggle in what’s become a tepid economic recovery.

“The increase in earnings is a very strong result considering the subdued retail environments we faced in 2010,” chief executive Maurice Prendergast said in a statement.

Higher underlying earnings came from a “focus on the management of inventory, margins and overheads, so we are pleased with the result”.

Earlier this month, the company was rated a ‘buy’ by Goldman Sachs JB Were as it was expected to hold its own ahead of increased competition in Australia. The shares were unchanged at $1.95 on the NZX today, and have dropped 7.3% this year.

Earnings before interest and tax from the Australian retail operations rose to 38.7 million, or 1% as measured as a percentage of sales. New Zealand retail EBIT rose 2% to $11.3 million as sales dropped 6%.

Pumpkin Patch said UK retail operations improved over the year, with a 5% increase in sales. Still, the strong kiwi dollar meant they fell 11% in New Zealand dollar terms, and it reported an underlying loss of $900,000, compared to a $5 million loss in the previous period.

Results from the company’s 20 remaining US retail outlets improved, with an EBIT loss of $2.7 million for the year, up from a $9.3 million loss a year earlier.

The underlying earnings for its wholesale operation fell 17% to $13.7 million.

Pumpkin Patch generates 85% of its turnover offshore, and has a presence in 22 markets around the world.

The retailer declared a dividend of 5 cents per share, taking the total payments for the year to 9.5 cents. That’s an annual increase of 27% which is fully imputed for New Zealand shareholders and franked 50% for those in Australia.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Pumpkin Patch turned to a profit in 2013; focus on repaying debt amid challenging conditions
Pumpkin Patch's Di Humphries appointed new chief executive
Former Glassons boss Di Humphries seen as strong contender for top Pumpkin Patch job
ACC takes advantage of beat-up Pumpkin Patch shares to lift stake to 9.2 percent
Pumpkin Patch becomes second retailer in month to cite Australian rivalry hurting profit
Pumpkin Patch turns to 1H profit after year-earlier reorganisation costs; sales fall
Pumpkin Patch wary of Christmas trading as retailers keep discounting
Pumpkin Patch FY earnings slide 20 percent, meets guidance
Pumpkin Patch says annual profit to beat estimates; stock jumps 11 percent
Conyngham resigns as design director at Pumpkin Patch