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Warehouse FY profit jumps 61 percent on property sales, acquisitions

Friday 13th September 2013

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Warehouse Group, the country's biggest listed retailer, boosted annual profit 61 percent after reaping gains on property sales early in the year, and from the contributions of its Torpedo7 and Noel Leeming acquisitions.

Net profit climbed to $144.7 million, or 46.5 cents per share, in the 12 months ended July 28, from $90.2 million, or 28.9 cents, a year earlier, the Auckland-based company said in a statement. Adjusted net profit, which strips out abnormal movements, climbed 13 percent to $73.7 million, within its guidance of between $73 million and $76 million. Sales rose 29 percent to $2.24 billion.

"While it is still early days we have made good progress on the transformation of the Warehouse Group, which is now a reshaped company compared to two years ago," chairman Graham Evans said. "The board is confident this strategic focus will continue to deliver results for our shareholders."

The board declared a final dividend of 5.5 cents per share, payable on Dec. 12 with a Nov. 29 record date. That takes the annual return to 21 cents per share, up from 20 cents a year earlier.

The shares gained 1.1 percent to $3.76 yesterday, and have climbed 26 percent this year. The stock is rated an average 'hold' based on seven analyst recommendations compiled by Reuters, with a median target price of $3.65.

The company's flagship 'Red Shed' brand lifted sales 4.4 percent to $1.59 billion and increased operating profit 5.3 percent to $85.2 million with improved performances at its Auckland stores and in the home, consumer electronics, baby, beauty, and confectionery categories.

The 'Blue Shed' stationery unit boosted sales 12 percent to $231.8 million and increased operating profit 4.8 percent to $10.3 million. The Noel Leeming stores reported $390.7 million in sales and $11 million in operating profit while Torpedo7 had revenue of $24.2 million and earnings of $700,000.

The company didn't offer earnings guidance, saying the Christmas trading performance is a significant influence and that it was too early to offer a forecast.

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