23 Sep 2016

Warehouse sales figures boosted by Dick Smith's demise

10:44 am on 23 September 2016

The Warehouse's full year net profit has beaten its own expectations, with group revenue up 6 percent to $2.95 billion.

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 country's biggest retailer said all of its retail brands delivered strong growth, despite some challenges with currency and a late start to winter trading.

The operator of the Red Sheds, Noel Leeming, Stationery and Torpedo7 chains said net profit rose 49 percent to $78.3 million in the year ending July, which also reflected some one-time property sales and the disposal of other assets.

Group revenue rose 6 percent to $2.95 billion, with the Red Sheds accounting for 60 percent of the sales.

The company said the demise of electronic retailer Dick Smith had helped Noel Leeming increase its market share, with fourth-quarter sales up nearly 17 percent, helping to drive profit the electronics retail chain's underlying profit up by 88 percent over last year's soft result.

Warehouse chief executive Nick Grayston said there was a lot more the company could do to increase profitability.

"Our task is to ensure that the business is a strong and profitable competitor in the future retail environment, which will look very different from the traditional retail business model that has served us so well to date."

He said the strategy was to reduce cost, with a focus on technology and customer services.

The Warehouse said it was too soon to provide a guidance for the current year, as the outcome would be significantly influenced by the Christmas season sales.

However, it said 2017's net profit should beat this year's result.

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