Kathmandu reports half year revenues up 27.5%

Outdoor clothing and equipment retailer Kathmandu Holdings reported a 27.5% lift in half year revenues to $106.6 million, saying the result came in an improved retail environment and reflected new stores and a strong Christmas promotion.

In its first result announcement since an initial public offering (IPO) in November, the company said its net profit for the six months to the end of January increased $6.8m to $4.4m. That excluded IPO costs and associated tax deductions.

It reported a bottom line loss of $11.3m, down 368.8% from a year earlier. Earnings before interest and tax (ebit) were up 49.6% to $15.5m, excluding IPO costs.

Same store sales grew 13.7%, or 11.7% at comparable exchange rates, with same store sales up 14.1% in this country and 9.9% in Australia. Two stores opened in this country during the half year, and six opened in Australia.

The company said it was confident it would meet its full-year prospectus forecast of ebit at $50.6m and net profit of $30.9m, after allowing for the full year pro forma adjustments contained in the prospectus.

Second half trading could be influenced by performance variability in the two key promotional events still to come in the second half, the impact of weather conditions on the key winter trading period, and retail uncertainty and variability in Kathmandu's markets.

As set out in the prospectus, no interim dividend would be paid, with a dividend of 6.7c per share for the second half, subject to the forecast being achieved.

Kathmandu chief executive Peter Halkett said the results were achieved in an improved retail environment, reflecting the store rollout programme and a strong sales result from the Christmas sales promotion.

The prospectus forecast of 12 new stores for the full financial year was now expected to be exceeded.

Although pleasing progress was being made in Britain, with good same store sales results, an ongoing uncertain short- and medium-term outlook for the British retail environment remained. No new stores were planned for Britain this financial year.

IPO costs were put at $21.3m, compared to a prospectus estimate of $15m, Kathmandu said.

IPO costs relating to advisory fees were substantially higher, due to the scope of work needed to meet the requirements of dual listings in this country and Australia. Additional costs were incurred as a result of the change in banking arrangements.

Kathmandu shares rose 7c to $2.26 in early trading.