The Warehouse Group Limited (NZX: WHS) 2021 Interim Results Announcement

Thursday 25th March 2021

The Warehouse Group confirmed today a record half year result for the FY21 first half with Adjusted Net Profit After Tax of $111.0m, up 140.2% on the previous corresponding period. Group sales were up 7.4% to $1,808.3m with online sales growth of 50.3%, making up 11.9% of total Group sales.

Group CEO Nick Grayston said the record result was pleasing following the 2020 financial year of disrupted trading conditions.

“Despite the interruption to trading by the Auckland COVID-19 level 3 lockdown of last August, the business performed well, demonstrating the ability to adapt and flex amid business interruption”, said Mr Grayston. “As a result of the hard work to execute our transformation by our whole team over the last few years, we were able to drive significant gross profit improvement and cost leverage. I want to thank the team for their resilience and dedication during this difficult period”.

The 7.4% increase in sales revenue contributed to Gross Profit increasing 15.8% to $655m. Group Gross Profit Margin increased 260 basis points to 36.2%. Major contributors to Gross Profit Margin included increased customer demand, continued benefit from everyday low pricing (EDLP) and investment in improved sourcing capability in The Warehouse. Other brands benefited from better inventory management, leading to improved sell-through. Group Operating Profit increased 125.4% on the prior period to $153.0m.

Reported Net Profit After Tax, including unusual items, increased 88.5% from $29.2m to $55m. Unusual items include the repayment of the $67.6m (before tax) wage subsidy in December 2020, while $11.3m (before tax) relates to restructuring costs and continued investment in our transformation, which is expected to have ongoing benefits.

Across the Group customer demand continues to be strong with stock levels and supply remaining well controlled. While we see isolated issues with suppliers and our supply chain around categories such as whiteware, we will continue to monitor and manage appropriately.

The Group’s strong financial performance and tight inventory management has resulted in cash on hand at half year end of $183.6m and total liquidity including cash and available facilities of $513.6m (FY20 H1: $236.7m).

Chair Joan Withers confirmed an interim dividend for the FY21 half year of 13 cents per share. “The interim dividend follows the special dividend we declared in February 2021 of 5 cents per share and reflects the strong Christmas trading and a continuation of elevated consumer spending in retail combined with the benefits of operational leverage as a result of our transformation investment”, Ms Withers said.

The dividend will be fully imputed and paid on 22 April to Shareholders on the Group’s share register as at the close of business on 7 April.

Please see the links below for details:

Cover Sheet

Results Announcement

Media Release

FY21 Interim Results Presentation

Interim Financial Statements

Independent Auditor's Review Report

Distribution Notice

Quarterly Sales Report

Source: The Warehouse Group Limited

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