Postie posts profit plus in a very tough market
New Zealand retail group Postie Plus Group Ltd has improved net earnings in the year ended 31 July 2011, despite a very challenging retail environment throughout all provinces.
Full year group sales increased to $115.73m, (2010: $113.77m).
Gross profit was $60.19m (2010: $60.50m). Operating profit was $1.92m (2010: $1.70m). Profit before interest and tax is $1.07m (2010: $0.78m).
Net profit of $656,000 has improved last year's bottom-line result of $415,000 although not as great as had been targeted at the half-year.
“Our trading year had distinct promise of a solid year, with postie yet again making market share gains in a sector that has been flat for the last 2 years,” said the chairman Mr Richard Punter. “However, the ongoing economic uncertainty has seen consumers inclined to commit more to savings than to personal spending on clothing.”
“In addition, the 2010-11 period has had more adverse events than most years in our history, with a sequence of natural disasters and a May-June 2011 experiencing historically high temperatures during these, our important winter months.”
Mr Punter said that despite the uncertainty generated by the above events the 2011 result provides encouraging confirmation that PPGL has not only locked in previous efficiency gains but has made further improvements in the cost of doing business.
The board's strategy to refresh the group's core brand, “postie” has strongly improved the chain's impact and full year sales underscored the benefit of investment in key areas of the business.
• Ongoing capital expenditure related to store refurbishment and store openings.
• Right-sized inventories to match variable market demand in a slower retail sector.
• Effective spend on strategic marketing programmes.
The chief executive officer, Mr Ron Boskell, said PPGL's results concur with a general slowing in consumer spending, exacerbated by natural events.
“We continued to showcase our brand with our store upgrade programme in a competitive marketplace which has enabled us to increase our market share.”
The group opened three new postie stores situated at Rolleston, Feilding and Chartwell (Hamilton) and one new BabyCity location at Lower Hutt.
“We are very pleased with the positive community response to the new stores which have traded well since opening with a range of quality apparel priced right for middle New Zealand families,” said Mr Boskell.
“The school uniform business, Schooltex, expanded its retail footprint in the Auckland region during the year. Our buying power offers New Zealand families a strong range of individualised school apparel and a new range of footwear at attractive prices across 83 postie stores. Customer schools have again benefited from our long-running rebate programme.”
Mr Boskell said “PPGL has had excellent continued good results from customer loyalty programmes which now embraces a strong e-commerce offer to our community of postie, Schooltex and Babycity customers.”