H1 profit at top of guidance range, Noni B

17 Feb '12

4 min read

Noni B Limited, the retail fashion group, announced an after-tax profit of $2.4 million for the first half of FY2012 (27 weeks ended 1 January 2012). This compares with $1.5 million for the first half of FY2011 (26 weeks ended 26 December 2010) and guidance of between $2.1 million and $2.4 million provided on 12 January 2012. Earnings per share were 7.5 cents (pcp: 4.7 cents) Revenue was $64.1 million, compared with $62.9 million for the first half of FY2011, with comparable store sales in line with the previous year.

Cash flow from operations was $9.6 million (pcp: $7.1 million). At 1 January 2012 the cash balance was $14.2 million, compared with $8.7 million a year earlier, and the company had no bank borrowings. Net tangible assets per share increased to 51.8 cents from 47.3 cents at the end of the first half FY2012, with the level of inventory in line with the previous year.

The company has declared a fully franked interim dividend of 2.5 cents per share (pcp: 1.0 cent) with a record date of 15 March 2012 and payable to shareholders on 29 March 2012. The board expects total dividends for the full year to equal between 50 and 75 per cent of after-tax profit.

'This improvement in profit, despite weak consumer confidence, resulted from higher margins and tighter control of expenses following wide-ranging initiatives to improve performance,' said David Kindl, joint managing director.

'Our margin improvement reflects our focus on customer service and the superior style, fit and quality of our clothes which help today's busy woman to look and feel special. These combine to differentiate Noni B, attracting customers and reducing the need to discount.'

'To maintain our high level of customer service, we have increased communication with store staff and streamlined operations so executives are able to provide greater support to the sales team. We are also continuing to invest in training and have extended to assistant store managers the certificate course in retail studies undertaken by store managers last year.'

'Several of the initiatives we have adopted to improve performance have originated from our staff. These include our styling by appointment service, now available throughout our network, which has proved very popular with customers and helps us to align rosters more closely with demand. Another initiative from the shop floor is the 'Your Voice' section of our website which enables direct communication between customers and our executive team.'

'We continue to fine-tune our store network, opening two stores in Victoria, where we have been under-represented, and closing three underperforming stores. A fourth store has been closed since the beginning of January, bringing the number of Noni B stores to 212. Where we renewed leases during the period, in most cases we succeeded in negotiating more favourable terms.'

'Our online store, launched in September, is growing revenuesteadily and we are pleased with its performance so far. We are also increasing engagement with customers on Noni B's million-plus loyalty database through Facebook and regular emails.'

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