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The Warehouse Group H1 profit impacted by transformation costs

The Warehouse Group has reported a net profit after tax dip 20 per cent to $29.9 million during the first half, largely impacted by $14.9 million of investment into business transformation efforts. 

Without these unusual items taken into account, group NPAT rose 16.7 per cent to $46.2 million.

Retail sales across the group, which includes The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7 Group, and TheMarket, rose 2.6 per cent to $1.68 billion. 

“Despite some challenges, good trading momentum has continued to date, however the uncertainty around the impact of the COVID-19 measures put in place by the government creates significant uncertainty for the second half of the year,” said Warehouse Group chief executive Nathan Grayston.

The group forecasted full year NPAT to land in the realm of $75-$77 million, though this figure assumes no further impact to trading conditions. With the spread of coronavirus to go on for some months by some estimates, it is likely that conditions will continue to shift as the government implements further measures. 

So far, the Warehouse Group has seen impacts to its financial performance, stock availability from its offshore supply chain, and potential impacts to customers and staff. 

The Warehouse chain saw sales growth of 1 per cent for the half to $938.8 million, after the second quarter suffered from a compressed holiday period.

Warehouse Stationery posted sales growth of 0.8 per cent on further integrations with The Warehouse chain, with more integrated stores to come. 

Noel Leeming grew sales 5.2 per cent, enjoying its best-ever Black Friday and Boxing Day sales periods, as well as the ongoing benefits of transformation initiatives. 

Torpedo7 sales grew 9.4 per cent, growing off the back of a new CEO, store network expansion, and increased investment.

The group didn’t provide a measure of sales progress for online marketplace The Market, stating it was still too early in the development, but adding that it is progressing in line with expectations. 

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