Smith furnishes improved returns

ALAN WOOD
Last updated 05:00 28/06/2014

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Home appliance and furniture retailer Smiths City Group says that despite a 24 per cent fall in net profit, most of the group is trading well, and it has recovered foot traffic in its rebuilt central Christchurch flagship store.

The group yesterday reported a fall in net profit to $4.1 million for the year to April 2014, from $5.4m in the 2013 financial year.

However, part of that fall was due to a lower insurance payout of $500,000 in the 2014 financial year, compared to a $5.5m insurance benefit in 2013.

The payouts relate to the 2010 and 2011 Canterbury earthquakes.

Chairman Craig Boyce said profit from operations before interest and tax was a more meaningful measure of performance. That showed a profit from operations of $5.5m, up 44.7 per cent from the previous fiscal year.

"This reflects increasing returns through the furnishings side of the retail business, the finance company and the property division, offset by a disappointing result from the appliance side of the business," Boyce said.

Operating revenues for the 12 months were slightly weaker at $220.65m.

Smith City shares closed up 4 cents at 54 cents yesterday.

Shareholders will receive an untaxed final-year dividend of 2.5 cents per share, to be paid on August 15. This brings the total dividend for the full year to 3.5c, unchanged from last year.

Managing director Rick Hellings said stage two of the repair of the the Colombo St property would likely be finished at the end of July. The board had not yet decided whether to move head office operations back from Watts Rd to the city.

Foot traffic at Smiths City Colombo St was stronger on the weekends, but weaker on weekdays, by comparison to pre-quake figures.

The board expects to finalise all insurance issues during the first half of the 2015 financial year.

Hellings said the company still had aspirations to enter the Auckland market, preferably through the purchase of a furniture company. But Smiths City had ruled out a couple of opportunities through a due diligence process.

The company's retail division and furnishings and bedding categories had performed very well, and the results for the Wellington operations improved significantly over the previous year.

Smithcorp Finance was also a standout performer a refinancing with ANZ in April 2013 meant lower-cost funds.

This offset a difficult year in appliances where margins were under pressure.

The company wanted to turn around the "under-performers", Powerstore and Alectra Service. The Powerstore operations in Riccarton Rd and Invercargill had been closed, with all staff deployed into the Smiths City business.

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- The Press

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