Employees & due diligence costs hit retailer COLORADO's profits

23 Mar '06

3 min read

National footwear and apparel vendor and trader COLORADO group announced that it had achieved earnings before interest and tax (EBIT) of $48.4 million for the year ended 28 January 2006 (2004/5: $62.1 million).

COLORADO's net profit after tax (NPAT) decreased 19 per cent on the previous corresponding period to $35.6 million (2005: $44.0 million) on group sales revenues of $466.0 million – down 1 per cent on the 2004/5 result of $468.9 million. The 2005/6 result includes the profit on sale of the Group's Melbourne office building ($5.0 million before tax).

The Board has declared a fully franked final dividend for 2005/6 of 18.0 cents per share, bringing the total payout for the year to 64.0 cents – an increase of 40.0 cents per share over last year. The increased dividend is attributable to the Board's decision during the year to declare a 40 cent fullyfranked special dividend as a capital management initiative.

The Company cited a prior year change from retail to cost accounting and one-off currency benefit, the expensing of employee shares and some unusual one-off costs including legal and due diligence costs in the current year as contributing factors for the decline in profits.

COLORADO group Chairman Mr Bill Gibson said 2005 had been a challenging year for the Company, given the subdued level of consumer spending and high level of competitor discounting in the market.

“In these difficult retail conditions, flaws in the execution of our strategy were exacerbated which contributed to the decline in profits,” Mr Gibson said.

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