Investors support Warehouse plan

Last updated 09:32 07/03/2014
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The Warehouse has received strong support for its move into the financial services sector with the $100 million institutional portion of its capital-raising fully subscribed.

The Warehouse Group said yesterday that it would move into the financial services sector and planned to carry out a capital-raising of $115m to support the expansion.

The listed retailer, which owns the flagship Warehouse Red Sheds, Noel Leeming, Warehouse Stationery and Torpedo 7, had received strong support from local and Australian investors in the private share placement undertaken yesterday, it said in a market announcement this morning.

Allocations were made to 15 institutions and a broad range of high-net-worth and habitual kiwi retail investors.

Shares sold as part of the $100m equity raising were priced at $3.23. The settlement date for the new shares was March 13.

Group chief executive Mark Powell said it was pleasing to see the market recognised the value of its move into financial services.

"Investors have signalled that they endorse our business strategy, and we are looking forward to extending the offer to eligible shareholders via the share purchase plan," he said.

The share-purchase plan, which was expected to open March 24, was seeking to raise $15m from eligible New Zealand shareholders of The Warehouse Group.

To this end, it has bought credit card company Diners Club New Zealand for $3m and plans to develop products such as a scheme card, a premium The Warehouse Diners credit card, instalment products - also known as hire purchases - and insurance.

Its first new products should be available next year.

The company reported a half-year net profit of $58.4m, down 45.2 per cent compared to the same period the previous year. It reported a 12.5 per cent drop in adjusted half-year net profit, which took into account such things as the sale of properties.

The trading halt placed on the company's listed securities before the announcement yesterday morning was lifted this morning.

The Warehouse Group's shares last traded at $3.61.

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- Fairfax Media

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