11 Mar 2016

Sales growth boosts Warehouse profits

10:22 am on 11 March 2016

Sales growth boosts Warehouse profits

The country's biggest listed retailer, the Warehouse Group, has reported a strong lift in its first-half profit after higher sales.

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

Photo: RNZ / Alexander Robertson

The company's net profit for the six months ending in January was $57.2 million compared with last year's $43.3 million.

The adjusted profit, which stripped out one-off costs, rose 22 percent to $45.6m in line with a forecast last month.

A spokesperson said sales grew 8 percent to $1.5 billion with growth for all its businesses - The Warehouse, Warehouse Stationery, Noel Leeming and Torpedo7.

The Warehouse Financial Services business lost $2.7 million in the six months as it was still being established.

The company said it had reaped the benefits that tight control of costs and growth in its profit margins, and its increased capital spending of recent years.

"The outlook for the second half will build on this positive start to the financial year but recognises some of the challenges ahead," said chairman Ted van Arkel.

"Notably, ongoing currency-driven input cost increases and the fact that there is one week less in the trading period compared to last year.

He said the group's adjusted net profit was expected to be between $61m and $64m, which would be up as much as 12 percent on a year ago.

The company declared an interim dividend of 11 cents a share.

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