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Pumpkin Patch turned to a profit in 2013; focus on repaying debt amid challenging conditions

Friday 27th September 2013

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Pumpkin Patch, the children's clothing retailer, turned to a profit in 2013 after posting a loss the year earlier when it reorganised its business, however it says conditions remain challenging.

Net profit was $5.1 million in the year ended July 31, following a loss of $27.5 million the year earlier, the Auckland-based company said in a statement. Profit before reorganisation costs was $8.5 million, within the company's $7.5 million to $9 million forecast range, and down from $10.1 million the year earlier. Sales fell 4 percent to $288.7 million.

"Although the company faced challenging trading conditions across its major markets during the year it continued to make significant progress in repositioning itself so it can successfully execute its long-term growth strategies in local and international markets," chief executive Di Humphries said in the statement.

"Trading conditions across Australia, New Zealand and major international markets are expected to remain challenging in the near term," Humphries said. "The change process is still ongoing and the full benefits will not be seen in FY14."

The company won't pay a dividend as it focuses on reducing debt. Net bank debt in 2013 fell 12 percent to $48.3 million, while inventory fell 3.9 percent to $59 million. Pumpkin Patch will consider paying a dividend at the end of its first half as it reviews its progress and its debt reduction plans.

Shares in Pumpkin Patch rose 1 percent to $1.01, having declined 25 percent so far this year.

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