Kathmandu sales assistant Saunoa Pau at the Dunedin shop
yesterday. New Zealand and Australian sales have increased,
but there has been a slight profit margin decline. Photo by
Sport goods retailer Kathmandu has posted a record
profit, largely in line with analysts' expectations, on the
back of increased sales in New Zealand and Australia.
For its full year to July, Kathmandu's after-tax profit was
up 27%, or $9.3 million, from $34.9 million to $44.2 million;
a result which included a $3.1 million taxation benefit from
a Australian intercompany loan revaluation.
Its shares were up more than 12% to a record high at $3.22
following the announcement. Kathmandu has been the second-top
performer for the stock exchange during the year, with its
shares up about 75%. It will pay a 12c dividend for the year.
Revenue was up 10.6%, from $347.1 million to $384 million for
the year, while earnings before interest and tax rose 11.2%,
from $57 million to $63.4 million.
Craigs Investment Partners broker Peter McIntyre said the
profit, excluding the tax benefit, was 3% below expectations,
while the ebit margin of 16.5% was slightly stronger than
''However, we are still seeing [profit] margins under
pressure from a year ago. There were more sales, but there
was more stock discounting,'' he said.
Sales growth in Australia made a 19.5% gain and in New
Zealand 8.6% gain, while overall margins were down 0.2%, but
in a target range of 62% -64%, the company said.
Forsyth Barr broker Suzanne Kinnaird said after-tax profit
was in line with expectations and the result overall helped
by a ''stellar'' first half result, but also raised concerns
over increasing discounting.
''A weaker-than-expected divisional result from Australia
offset a stronger-than-expected result from New Zealand,''
She said the lower profit margins from Australia suggested
Kathmandu might have been impacted by increased discounting
''[That] is in line with recent commentary from both
Hallenstein Glasson and Pumpkin Patch,'' she said.
Chief executive Peter Halkett said it expected ''another
solid performance'' during full-year 2014, given its
investment programme during the past two years, but that was
dependent on no further deterioration in economic conditions.
''Operating expenses remain a key management priority,'' the
There are 15 new stores scheduled to open during the year.
Store numbers had risen from 90 at the start of 2010 to 136
at the end of 2013.