Christchurch based retail group, Smiths City, has reported operating surplus after tax for the six months to Oct last year of $1.37m compared with $2.55m from the previous year, also announcing it will revamp its store network.
Directors for the company said both period results were affected by “one off” costs due to restructuring and the closure of uneconomic stores.
Total revenues for the six months were $113.9 million – a 7.2 per cent increase on the previous half year, which increases to 18 per cent ahead of last year if revenue from discontinued operations is removed from the prior year result.
The company declared a fully imputed half year dividend of 1.0 cent per share (last year 1.0 cent unimputed).
There was a 67 per cent improvement in core trading profits during the six months, which the company’s board attributed to the structural changes made and closures of loss making businesses beginning to kick in.
Total Assets were down by $2.3 million to $131.332 million, which was despite adding $5.0 million of stock after the company’s acquisition of the three store Furniture City chain.
“The improvement in our trading activities derives in part from our reset of our marketing activities based on the research carried out early in the year; in part from our focus on instore execution and our continued enhancement of our product selection,” said Roy Campbell, chief executive of Smiths City.
“While we still have internal efficiencies to implement that will result in further savings to the Group via continuous improvement to our buying, marketing, logistics and systems platforms, our biggest opportunity is in the reset of how we present our offering to the consumer.”
Smiths City has hired Studio Gascoigne to redesign its stores, with the first rollout of a new concept to be at the Hastings store opening in February 2017.
“Our new concept will clearly signal to the market and our customers the value and service they can expect from Smiths City and demonstrates our point of difference when compared to others,” said Campbell.
“This new look and feel will then be rolled out across our network, targeting key locations as a priority.”
Campbell said the six months to October saw a 20.4 per cent reduction in inventory held in the business, “made possible via a more informed structured approach to our purchasing and category management and in part by the initiatives taken to centralise inventory held.”
