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Restructuring costs dent profit of NZ retailer Postie Plus

28
Sep '12
Nationwide retailer Postie Plus Group Limited (PPGL) reported a normalised full year net profit of $493,000 before one off restructuring costs (net loss of $183,000 including one off costs) relating to the sale of Babycity and consolidation of its marketing and distribution centres to Auckland as key strategic steps to build its flagship Postie apparel brand.

Chairman Richard Punter said the performance reflected the Group's determined decision to forge ahead with the restructuring to focus the business on extending the store and on-line presence of the iconic Postie brand, in order to be competitively positioned when consumer confidence recovered.

"We took the hit now with costs associated with the sale of Babycity which no longer fitted our business model and the decision to recruit new retail expertise, outsource our distribution systems and processes to a new purpose-built centre at Mangere airport and begin a progressive shift of key marketing and other functions to Auckland," he said.

Mr Punter said that having taken into account the company's financial position and compliance with all banking covenants, directors were pleased to advise shareholders that the Board had determined that it was appropriate to pay a fully imputed dividend of one cent per share. The dividend will be paid on 14 December 2012 with an entitlement date of the 7 December 2012.

Postie, voted New Zealanders favourite clothing retailer in an independent survey in 2012, had maintained margins and sales volumes while Group sales for the year slipped 4 per cent, indicative of the continuing flat trading conditions and Babycity being sold in May.

"We have continued to move swiftly to drive value chain efficiencies to deliver savings in the future and extend both our retail capability and nationwide footprint of the Postie brand where we have genuine traction and an opportunity to grow as an appealing retailer for everyday Kiwis," Mr Punter said.

Chief Executive, Ron Boskell said during the period under review two new Postie stores had been opened and four closed, including one affected by the Canterbury earthquakes, while the other three were combined with existing Postie stores. A nationwide store refresh programme was also rolling out on schedule, overseen by recently appointed Postie GM, Jane Gammon, who has a successful track record in apparel retailing internationally. Since balance date, a new Postie store has opened in Wellington and in the 2012-13 financial year another three stores are to open in Auckland.

"We are making the Postie shopping experience more exciting, fashionable and attractive while continuing to provide the basics that our loyal shoppers buy time and time again," Mr Boskell said. "We're seeing a pick-up in on-line sales, generated by our rewards programme and also new season collections that have something for all the family at affordable prices."

Postie Group Limited (PPGL) is a New Zealand retail success story with a nationwide chain of 84 apparel stores located in major cities and heartland towns. 

Postie Plus Group Limited (PPGL)


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