Ann: ADDRESS: KMD: KMD - Chairmans Address to AGM 21 November...

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					KMD
21/11/2014 12:52
ADDRESS

REL: 1252 HRS Kathmandu Holdings Limited

ADDRESS: KMD: KMD - Chairmans Address to AGM 21 November 2014

KATHMANDU HOLDINGS LTD 21 NOVEMBER 2014
CHAIRMAN'S ADDRESS TO ANNUAL GENERAL MEETING

Good morning ladies and gentlemen, I am pleased to talk to you for the first
time as Chairman of Kathmandu Holdings Ltd.

The retail market in New Zealand and Australia has been challenged in the
last year with weak consumer confidence, so I am even more delighted to
report that 2014 was a solid year of performance for Kathmandu.

Kathmandu's group sales increased in the year by $8.9 million to
$392.9million. Same stores growth was over 4% and we opened 15 new stores.

Solid same store sales growth at consistent gross margins resulted in growth
in earnings before interest and tax. This was despite the significant
strengthening of the New Zealand dollar during the year, which has the effect
of reducing our Australian dollar earnings when we translate them into New
Zealand dollars for reporting.

This same store sales performance was fairly consistent across the whole
year, except for the month of June when unseasonably warm weather had a
negative impact on trading during the first part of our winter sale
promotion.

In New Zealand dollar terms our increase in earnings before tax and interest
in 2014 was quite small - just $0.9m.

If the New Zealand dollar had not strengthened as it did in the year our
earnings before interest and tax would have been up 10% or $6.6m.

Net profit, which is the bottom line, and a measure of how much money is
available to pay dividends or retain in the company for future growth, was
down in the year by $2m to $42.2m. Again the strengthening of the New Zealand
dollar played an important part here. Without this net profit would have been
up by $2.9m.

We have maintained our total dividend payout rate for the full year at 12
cents per share.
Leadership
You will have noticed that after 5 years Peter Halkett is not sitting up on
the stage this year. Peter retired from the company this year. Peter led
Kathmandu for three years before the company listed and for five years as a
listed company. Peter did a great job for staff, customers and shareholders
in his time as CEO. It would take me a long me to list everything Peter did
for the company, but to name just a couple of very important initiatives:
Peter led the comprehensive re-branding of Kathmandu and he led the rapid and
successful roll-out of new stores in Australia. Australia has been a tricky
place for a number of Australasian retailers expanding out of New Zealand but
Kathmandu has thrived from the start and is now truly Australasian, much of
which is due to Peter's leadership.
We thank Peter very much for all he has contributed to the company and wish
him well in the future.
Mark Todd, who you will surely recognize is up here on the stage. He has been
with the company for 16 years and is now serving as our Interim CEO. We are
very confident the leadership of the company is in good hands.
We are well underway with our search for a new CEO for the company. It is
difficult to predict when the process will be compete, so I won't try to do
so, but I will say the Board is pleased with progress.
I will just say a couple of words about where to from here and then pass you
over to Mark who will talk in more detail about our performance and plans for
the future.
Growth Strategies
One of the most interesting things the Boards of companies do is work with
management on growth strategies and we have done quite a bit of that this
year. Growth for brand-owning retailers, such as Kathmandu, comes from a wide
range of sources.
Growth comes from new products, new store layouts and better service to drive
same store sales growth. Growth comes from developing a strong loyalty
program such as the Summit Club. And growth of course comes from opening new
stores. Growth also comes from new channels such as the internet and growth
comes from entering new markets as Kathmandu did about seven years ago when
the company first started opening lots of stores in Australia.
All of the current growth strategies for Kathmandu are working well and we
will continue them. But it is time to accelerate another strategy that will
deliver material growth for the company in the medium term - meaning in
perhaps 4 or 5 years. This strategy is to grow our sales faster outside
Australia and New Zealand.
We have chosen to focus on the United Kingdom because we believe Kathmandu's
heritage and technical credentials can be grown in that market. And we
already have four stores there. And they speak English. And it is a big
market.
Our growth outside Australia and New Zealand is focused on the UK but on
international growth more generally too. We are now set up to receive orders
from all over the world though our website and mobile sites and to fulfill
those orders efficiently.
In addition we are placing our product on online marketplaces around the
world. We are currently on eBay here in Australia, Trade Me in New Zealand
and Next, Amazon and eBay in the UK. We will expand this footprint further.
Strategies are all well and good but it is the people that implement the
strategies that really count. And we are in good shape there too. In the last
year Alison Evans has joined us as General Manager of Retail for Australia
and New Zealand. Alison comes from running all the Target stores. We are
delighted to have her and she is here today so feel free to ask her about all
the plans she has to grow Kathmandu in this part of the world. We have also
been joined in the UK by Alex Fisher who is leading our growth plans on the
ground in Europe. Many of the current Kathmandu team are here. Please go and
ask them what they are up to. They will be happy to tell you.
It is time for me to sit down but first I would to thank my fellow Directors
for their support and advice and hard work in my first year as Chairman.
And on their behalf I also thank you for your support as investors. We know
you have invested in Kathmandu for a steady dividend payout and for continued
growth and that is what we are focused on delivering for you.
I will now ask our acting CEO, Mark Todd, to address you.
David Kirk
Chairman
End CA:00257956 For:KMD    Type:ADDRESS    Time:2014-11-21 12:52:37