Postie Plus says interim trading environment challenging

Friday 25th March 2011 1 Comment

Postie Plus Group has posted a small interim net profit in a tough retail environment and while dealing with earthquakes in its home city of Christchurch.

The operator of Postie Plus and Babycity stores reported a net profit of $749,000 in the six months to January 31, which was a turnaround from a $1.11 million loss in the same period last year.

This was after an income tax benefit of $302,000 compared to $484,000 last year. The net loss before tax was $1.05 million compared to a loss of $1.598 million last year.

Sales of $56.54 million were up 4.6% on the prior corresponding period. Earnings before interest and tax of $610,000 were down from $1.14 million in first-half 2010. No dividend was declared.

The company had a writedown of $147,000 for obsolescent stock and shrinkage, which compared to $86,000 last year.

"Our focus is to right-size the business and related inventory levels to match market demand and we expect incremental growth in a slow retail environment," chief executive Ron Boskell said.

The Christchurch earthquake on February 22 was noted as a post balance date event in the accounts.

The company's Sydenham, Eastgate and New Brighton stores remain closed but the retailer said business interruption insurance would cover the loss of profits.

Boskell listed challenges the company faced in the period covered by the result as extended recessionary conditions in retailing, a rise in goods and services tax, disruption from the September 4 earthquake in Christchurch, the Boxing Day aftershock and weak trading pre-Christmas.

"Gross profit margins have been maintained in a highly competitive market. Market share continued to increase," he said.

Also, retail websites for Postie, Babycity and Schooltex have demonstrated good growth through recent enhancements.

Kathmandu founder Jan Cameron is a substantial shareholder in Postie Plus.

NZPA

Comments from our readers

On 26 March 2011 at 12:17 pm Loss not Profit said:

WRONG. Postie Plus Group did not make a net profit as the article above states. Postie Plus announced yesterday (25/03/2011) a NET LOSS for the 6 month period to 30/01/2011 of $749,000 compared to a net loss for the same period a year earlier of $1,114,000. This is why they are not paying a dividend and are receiving income tax benefits. I can't remember the last time PPG posted a profit. http://www.stuff.co.nz/business/industries/4810266/Loss-an-improvement-for-Postie-Plus http://www.ppgl.co.nz/index.php?option=com_wrapper&view=wrapper&Itemid=91