8 Mar 2018

Warehouse Group half-year profits up

12:55 pm on 8 March 2018

The country's largest retailer, the Warehouse Group, has made a better half-year profit as it cut its losses from its financial services business.

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Photo: 123rf.com

The net profit for the six months ended January was $31.8 million, compared with $13.6m the year before, which was affected by the loss-making consumer finance division as well as restructuring costs and writedown in assets.

The profit from continuing operations - excluding the finance business - fell 15 percent to $35.3m, which was above the company's forecast.

The Warehouse is restructuring its business by cutting prices, amalgamating some operations, and putting more effort into online sales so it can cut costs, boost sales, and combat the threat of on-line retail giant Amazon, which has just opened operations in Australia.

Group sales fell 0.9 percent to just under $1.6 billion, led by a drop in sales for the Red Sheds and Warehouse Stationery, while Torpedo 7 and Noel Leeming had stronger sales. Online sales rose just over 10 percent to $117.4m.

Chair Joan Withers said the business is going through considerable change but is in a better position.

"With a strong team now in place, and support from external experts, we are confident that we can successfully execute our next major change agenda in 2018 to drive improved performance," she said.

The company declared an interim dividend of 10 cents a share.

The company expects the second-half to be similar to last year, and its full-year profit could be down by up to a quarter at $50 to $53m.