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Decline in net earnings at Postie & Babycity

28
Mar '12
The continued volatility in consumer confidence in New Zealand is reflected in an almost unchanged trading performance by the apparel retailer Postie Plus Group Ltd (PPGL) during the company's opening six months of the current year.

The trading period ending 29 January 2012 had sales of $53.92m which was down $2.6m, or 4.6% compared with last year.

A strong commitment by management to internal efficiencies and a positive effort by sales staff in the group's two national retail chains, Postie and Babycity, have kept the decline in net earnings to a loss of $0.77m compared to $0.75m last year.

Given the continuing hesitancy in retail generally, we are pleased to have held the overall result close to the same period last year - said Mr Richard Punter, chairman.

- Importantly, we have left behind the large first half losses that previously marred our results and we look to continuation of profitability for the full year.

- Gross profit was $28.65m, compared with $29.29m in the prior corresponding period. Earnings before interest and tax was a loss of $0.69m, compared with a loss of $0.62m last year.

- Whilst we are dissatisfied with a first half loss, we recognise the importance of clearing our winter seasonal apparel each spring, said the chief executive Mr Ron Boskell.

- This is usually followed by profitable trading in the second half year.

- Despite the challenging environment, our core businesses are in excellent shape for the forthcoming all-important winter season. Our focus on costs has once again been a strong feature of our performance, with expenses down $458,000 or 1.5% and inventories are well under control.

- The Postie chain of 81 stores is performing well, including all of our Christchurch stores. Our Postie upgrade programme continued during the period and we continue to see a positive response from customers to the refreshed stores.

PPGL closed four Babycity stores in marginal locations during the period and has since closed a further two stores. This reduced the number of Babycity stores to 18 - Mr Boskell said

We have continued the development of our online retail business. PPGL is pleased with the increasingly strong market positions held by our retail web sites for Babycity, Postie and Schooltex.

The significance of a strong winter season to our annual result is well understood and management and staff will be striving to extract the higher volume and value of sales on which a second half profit is based and I can report that the group overall has made a good early start to the new season, said Mr Punter.

Postie Plus Group Ltd (PPGL)


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