24 Mar 2014

First-half profit up at Kathmandu

12:36 pm on 24 March 2014

Kathmandu lifted its first-half net profit by 9.9 percent, despite the drag of the high New Zealand dollar on Australian sales.

Net profit for the outdoor clothing and equipment retailer rose to $11.4 million in the six months ended January, compared with $10.3 million in the same period a year ago.

Kathmandu's total sales rose 1 percent, with Australia accounting for more than 61 percent of that.

Chief executive Peter Halkett said sales at stores open at least a year, an important indicator, rose in Australia, New Zealand and Britain.

But exchange rate movements saw sales through stores open at least a year declined 3.5 percent when converted back into New Zealand dollars.

Mr Halkett said if the exchange rate had held steady, the result would have been 2.2 million dollars higher.

He said the company managed to improve gross profit margins by more than a percentage point to nearly 64 percent, and to effectively manage its costs.

Online sales grew by nearly 50 percent (49 percent at comparable exchange rates), which Mr Hallkett said provides promising future growth opportunities.

Kathmandu opened five new stores in the first half year, most of them in Australia, and closed two, including one in London, to take total stores to 139, 10 more than a year earlier.

Mr Halkett said the company aims to have a total of 15 new permanent stores in the financial year.

He said Australia is more challenging than last year, and the currency will continue to drag on second half profits though it's too early to estimate the full-year result.