Kathmandu reports sales jump

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Kathmandu's first half yearly results as a listed company shows a 27.5 per cent increase in sales to $106.6 million in the half year to January 31, despite difficult trading conditions for many retailers.

Net profit after tax was $4.4m up from a $2.4m loss for the same period last year and earning before interest and tax rose to $18.1m, up 41.2 per cent from $12.8m.

The figures do not take into account costs associated with floating the retailer on the NZX and ASX in November, for which the company has already paid $19.7m.

Kathmandu shares rose 3.2 per cent, or seven cents, yesterday immediately following the news to an all-time high of $2.26, with a market capital of $438m.

Kathmandu Holdings  chief executive Peter Halkett said he was pleased with the company's trading performance following last years listing.

"It is very satisfying to deliver a good first result announcement given we have recently been added to the ASX 300 index and are already included in the NZX50," he said.

The company cites consumers move towards more home holidays and camping and a strong Christmas performance as drivers for increased sales.

The company also turned around a negative operating cashflow of $8.3m in the first half in 2009 to report a $500,000 positive cashflow.

It had also reduced debt from $183.9m to $73.9m by end of January 2010, using money raised in the IPO.

The company is expecting a full year net profit after tax of $30.9m.

During the first half year, Kathmandu opened eight new stores, two in New Zealand and six in Australia, bringing the total in both countries to 90 stores.

A further five stores are expected to be opened before the end of the year.

Sales increased by more than 20 per cent in both New Zealand and Australia, with the biggest increase in the Britain with a 37.3 per cent half-yearly increase in sales.

However, the company identified Australia as the biggest prospect for growth, describing the New Zealand retail environment as fragile and Britain's recovery as slow.

- © Fairfax NZ News