Children's clothing retailer Pumpkin Patch continues its
financial turnaround, moving from a massive loss a year ago to
a profit of more than $5 million, further reducing its debt and
reaping benefits from successful online operations.
Online sales have firmly moved into double digit percentage
figures, which few other major listed retailers in New
Zealand have managed to replicate.
Last year, Pumpkin Patch posted a $27.5 million loss, which
included restructuring costs of $37.6 million, but this year
recorded an after tax profit of $5.1 million, for the year to
Craigs Investment Partners broker Peter McIntyre said
following the ''major surgery'' during restructuring, Pumpkin
Patch's online sales were underpinning its resurgence and
this year's ''strong'' financial result.
''Trading conditions in New Zealand and Australia were tough,
but in the other 20 countries sales were strong, up about
20%,'' he said.
He said online sales were up 18% on a year ago, at $38
million, which was more than double the earnings before
interest (Ebit) from all its New Zealand stores combined. The
company also made a $3.4 million gain in foreign exchange.
''Online activity really is forging ahead for Pumpkin Patch.
It's one of their key markets,'' he said.
Forsyth Barr broker Suzanne Kinnaird said the result was in
line with expectations and at the higher end of recent
guidance, between $7.5 million and $9 million. The result is
down due to difficult trading conditions, particularly in
Australia, and the group's Ebit was below expectations,
driven by higher than expected central support costs, due to
one-off reorganisation costs of around $3.9 million.
''Growth in online sales was strong ... Pumpkin Patch is the
most advanced on the New Zealand listed retailers in the
online space,'' Ms Kinnaird said.
Crucially for Pumpkin Patch, it had reduced net debt, down
11.6% from $54.6 million to $48.3 million while stock held
was down 4%, from $61.4 million to $58.9 million.
While there would be no final dividend, as Pumpkin Patch
concentrated on paying off debt, its shares were up 6% to
$1.06, albeit on light volumes.
Pumpkin Patch chief executive Di Humphries said while the
''significantly'' better result left the company in a
stronger financial position, ''there's still a lot of hard
work ahead of us, especially while trading conditions remain
The volatile and tough trading conditions for retailers has
been reiterated again this week.
While Kathmandu reported a record profit, which sent its
shares soaring to new highs, its profit margins were squeezed
slightly during the year, highlighting the company's
attention to detail and continued hunt to optimise individual
Kathmandu's revenue was up 10.6% to $384 million, earnings
before interest and tax were up 11.2% to $63.4 million and
after tax profit leapt 27% to $44.2 million; overshadowing
Hallenstein Glasson's result.
Hallenstein Glasson sales were up 2% to $220 million, but
profit before tax slid from $29.3 million to $25.9 million
and profit after tax fell 11% to $18.7 million, with
declining margins and a warmer than usual winter taking its
At a glance
New Zealand: Pumpkin Patch and Charlie & Me stores,
International: 288 partner locations across 20 markets
(Australia 129 stores).
Potential partner negotiations: Middle East, Europe,
Asia, Central America and South America. Talks include
franchise, wholesale, and online models.
- Source: Pumpkin Patch