Half-year profit hike for Pacific Retail

By Phil Boeyen, ShareChat Business News Editor

Wednesday 13th December 2000

Pacific Retail Group (NZSE: PRG) has delivered an interim profit of $2.4 million, a jump of 27% on the same period last year.

Profit before tax for the six months to the end of September was $6.1 million, up 19.6% from $5.1 million last year. Sales rose $20 million to $198 million.

The half-year result includes an equity writedown of $1.7 million on the group's investment in Orion Ventures, the parent company of internet retailer FlyingPig.co.nz. FlyingPig has been sold to IT Media but Pacific Retail still owns Orion Ventures and plans to use it to further its own clicks and mortar strategy.

Pacific Retail has four major operating units - Noel Leeming, Bond & Bond, Computer City and Pacific Retail Finance.

Chairman Maurice Kidd says that consistency in decision making, reduced overheads, improved margins and carefully controlled interest-free credit activity all contributed to the improved interim result.

"In addition the croup has initiated a number of long term projects to further improve performance. These include better stock management, distribution and logistics initiatives. However we do not anticipate consequent benefits to flow on until mid-to-late next year.

The company's new boss, Peter Halkett, says that contrary to recent reports about the state of the retail market, the appliance market is quite buoyant.

"In particular, we achieved good revenue growth in newer categories such as computers, large screen televisions and communications products."

Mr Halkett says plans for continuing to grow the business include opening new stores, extending existing store square meterage, expanding the Living and Giving business and maintaining a drive for greater efficiency.

The company says the six-store Living and Giving chain, which it bought in October, offers excellent national expansion potential in the country's fragmented gift market.

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