12 Jan 2016

Warehouse flags strong profits ahead

10:59 am on 12 January 2016

The Warehouse Group, has said it expects its first half profit to rise as much as 21 percent on the back of strong sales growth, especially in the run up to Christmas.

A worker scans items at The Warehouse in Lyall Bay, Wellington

At The Warehouse Lyall Bay, Wellington for $24.49 you can buy a child one pair of pants, a tee shirt, a jersey and some shoes. Photo: RNZ / Alexander Robertson

The company said it expected an adjusted net profit after tax for six months ended January of between $43 million and $45 million.

It said sales and profit were up across all its businesses -- the Warehouse big red sheds, Warehouse Stationery, Noel Leeming and Torpedo7, although it gave no group breakdown.

The company said the improvement comes from control of costs and growth in its profit margins, as well as the benefits from its increased capital spending in recent years. However, its fledgling financial services business is still losing money.

"We now expect that full year profit to be up on last year, although not to the same extent as these first half results," said chairman Ted van Arkel.

The Warehouse reported a full year profit will of $52 million last year. An updated full year profit forecast will given at the half year result in mid-March.

Warehouse shares gained 5 percent to $2.73.

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