Pacfic Retail has a bumper year profit

By NZPA

Thursday 30th May 2002

Entrepreneur Eric Watson's Pacific Retail today posted a March year net profit of $17.4 million, up 68 percent on a year ago.

In line with its policy of delivering shareholder value, the company said it would not pay a dividend.

The group comprising retail chains Noel Leeming, Bond and Bond, Computer City, Living & Giving and new computer retail brand Big Byte, saw revenue increase to to $444 million from $402 million.

The result did not include the recently acquired lingerie manufacturer/retailer Bendon.

The operating profit before tax rose to $25.1 million from $20.2 million and earnings per share rose to 34.5 cents from 20.5.

Chief executive Peter Halkett said its contract manager scheme was now starting to deliver improved profitability.

"On top of this our new brand development and initiatives undertaken by Pacific Retail Finance have contributed to the increased profit."

The group achieved sales growth above the 6.2 percent experienced by the sector according to the Retail Trade Survey.

Noel Leeming will soon pilot furniture retailing in two new purpose built stores in Auckland, Mr Halkett said.

The group launched the first of its Big Byte stores in October last year and plans to grow the Big Byte chain to 10 to 12 stores nationwide.

The large format specialist computer, technology and communications stores cater to the more sophisticated home buyer and small business customer.

Living & Giving, the Group's gift and homeware retailer, has increased in size from 6 to 15 stores during the period. Living & Giving will over the next two to three years continue its national expansion and consider new category opportunities including more exclusive and unique merchandise. Chairman Maurice Kidd said that Pacific Retail Finance had expanded outside its core role of supplying hire purchase finance to the appliance division during the year.

It was capitalising on opportunities in the wider consumer finance sector and had increased its range of products and expanded its third party financing business.

Pacific Retail Finance's first ranking secured debenture, which was launched last July, had raised more than $33.6 million by March 31.

Bendon would be run as a separate business unit.

"Although Bendon has 23 retail stores, the acquisition represents a move outside of our core retail sector, but one where our commercial skills and sales and marketing expertise will add value," Mr Halkett said.

Pacific Retail shares jumped 11 cents to $2.55 shortly after the result.

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