The Warehouse Group posted a strong profit of $57.2 million for the six months to January 31, a 32-per cent increase from last year’s $43.3 million, driven by its homeware and clothing sales.
The adjusted profit, which stripped out one-off costs, increased 22 per cent to $45.6 million in line with a forecast last month.
The company stated in a news release that all its retail brands, The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7 and financial services, recorded positive growth on the back of strong sales and effective management.
The Warehouse Group reported that while the first half of 2015 was a particularly difficult trading period and included a number of one-off costs, the first half of 2016 “has been achieved by a positive retail environment and changes that we have made to the businesses, focusing on improving our customer offer, margins and cost control. These changes are expected to continue to deliver benefits into the future.”
The company posted an 8.4 per cent increase in revenue of $1,568.5 million, up from last year’s $1,447.3 million. Its operating profit increased 28.3 per cent to $73.117 million compared to last year’s $56.990 million. Its earnings before interest and tax increased 41 per cent to $89.377 million compared to the $63.383 million from the prior corresponding period.
The Warehouse Group’s online sales in the country saw an increase of 24.1 per cent to $52.8 million.
“This result, building on the solid performance in the second half of last financial year, shows that the company is delivering on profit growth, and on driving returns from the investments made in past years,” said TWG chair Ted van Arkel.
“We are confident that the team, under Nick Grayston’s leadership, will continue to grow sustainable profitability. The outlook for the second half will build on this positive start to the financial year but recognises some of the challenges ahead; notably ongoing currency driven input cost increases and the fact that there is one week less in the trading period compared to last year,” Van Arkel added.
The company also announced that they expect the second half profit to be in line with the second half result last year. The expected Adjusted Net Profit After Tax for the full year is between $61 million and $64 million which would represent a 7 per cent to 12 per cent profit growth year on year.
The Warehouse Group reported an 11 cents interim dividend payable on April 15.
The Warehouse Group Limited comprises of 93 Warehouse stores, 72 Noel Leeming stores, five Lifestyle Appliance stores and 66 Warehouse Stationery stores in New Zealand and several online businesses. The company had a turnover of $2.8 billion in FY15 and employs over 12,000 people.
