Retail chain posts $1.6m profit

TAMLYN STEWART
Last updated 05:00 21/12/2012

Relevant offers

Industries

Air New Zealand sets new benchmark for wine industry Wellington's Felix Cafe property put on the market TVNZ heads to Rio but criticises Sky TV demands Petone building offers CBD perks without the cost or chaos Miner found dead after front-end loader rolls in Waihi goldmine Annual building consents rise to a 12-year high Ministry issues fresh warning over phone scams Macpac happy with new Australian owners Champ Ventures Chinese get 70 per cent of NZ entrepreneur work visas Wellington bar owners 'terrified' of police and a one-way door policy for party zone

South Island-based retail chain Smiths City has reported a $1.687 million net profit for the six months to October 31, a 2.6 per cent increase on the same period last year, describing trading conditions as "difficult".

Operating revenues for the six months were $109.675 million, just below year-ago levels of $109.859 million.

Trading conditions in the six months to the end of October continued to be "difficult", Smiths City chairman Craig Boyce said.

"Household spending is restrained, appliance prices have fallen leading to lower dollar margins, competitor activity is aggressive and business expenses, particularly occupancy and insurance expenses, have risen considerably.

"Given these conditions, the board is satisfied with the trading results achieved to date and recognises that trading conditions - outside of Christchurch - are expected to remain subdued."

Shareholders will receive an unimputed half-year dividend of 1 cent per share to be paid on February 15.

Boyce said the company would maximise trading opportunities like the Christchurch rebuild and seek alternative ways to reduce costs.

During the six months the company also reopened its last two Christchurch stores which had closed because of the earthquake - Furniture Concepts and Powerstore have reopened in the same building on Moorhouse Avenue.

Finance company interest was a major expense to the group, Boyce said.

Smiths City planned to change financiers for Smithcorp Finance by January 2014, a move that would result in significant savings in interest costs for the group, he said.

Managing director Rick Hellings said that while trading results in the July quarter were reasonably strong, the October quarter was softer, reflecting ongoing price deflation and a more uncertain economy. Trading conditions were particularly soft in the lower North Island.

The appliance market continued to be tough, particularly in consumer electronics. In the October quarter, flat screen television prices fell by more than 20 per cent.

In the last six months management had focused on increasing sales in its profitable lines.

Ad Feedback

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content