WHS
22/11/2013 09:30
ADDRESS
REL: 0930 HRS The Warehouse Group Limited
ADDRESS: WHS: Chairmans Address 2013 Annual Meeting
Chairman's Address
To The Warehouse Group Limited Annual Meeting
22 November 2013
Welcome to the Annual Meeting of The Warehouse Group Limited.
Introduction
You may recall that last year I addressed you regarding the fact that this
was the first year of a multiyear turnaround for the company. Last year I
summed up by saying we have seen positive progress, and we are excited about
opportunities for the future.
Well, what a difference a year makes. This past year has been huge by any
measurement. A truly exciting and stimulating time.
Today we are a vastly different company. Today we are a progressive and
aggressive retail group trading across a vast range of the NZ retail
landscape.
It all started with the purchase in September 2012 of Insight Traders, a
business with bargain sourcing capability, followed by the significant
acquisition of Noel Leeming in December 2012. This was quickly followed by
the acquisition of the business of Complete Entertainment Services, a
specialist wholesale and unit pick supply chain business. Then, in April this
year we purchased a majority shareholding in the online company Torpedo7, a
leading New Zealand online retailer operating through Torpedo7, 1-day and
other websites. In June it was a major shareholding in Shop HQ, a specialist
pet website, pet.co.nz, and in August Torpedo7 acquired the business of No1
Fitness, a multichannel sports equipment retailer. Noel Leeming Group
acquired the outsourced information technology solutions business of McLean
Technology in November. In addition, Torpdeo7 will acquire the business of
Shotgun Supplements in December, and yesterday the Board approved the
conditional purchase of R & R Sports by Torpedo7 in December.
Nine acquisitions will have been completed in a little over a year. Plus,
there have been other initiatives such as the introduction of I-love-Beauty,
selling branded beauty products and a new Direct Response TV offer.
In the interests of time Mark will elaborate on these opportunities in
greater detail in his address.
All these acquisitions and innovations were initiated to follow the customer,
and to secure their hearts and minds in today's and tomorrow's ever changing
shopping environment. We believe today's shoppers have choices as to how and
where they shop.
Our goal is to be clearly NZ's No1 multichannel retail group having "Bricks
and Mortar", online shopping, and any other form of shopping that the
customer desires.
You all will know that The Red Sheds, The Warehouse stores, are our major
profit contributor. Our strategy is to grow our other business units to be as
big a contributor as The Red Sheds. In other words, in the future our goal
is to see 50% profits from Red, and 50% from the balance of our group.
At this stage the other business units are all in various stages of
development, and whilst they hold exciting prospects. There is no doubt that
they will take time to make meaningful contributions.
As this is my last Annual Meeting to shareholders I would like to acknowledge
the contribution of our CEO Mark Powell. Whilst I have been a director for
some years, when Mark was appointed Group Chief Executive some 2 years and 8
months ago it was agreed that I take over as Chairman, and what a journey it
has been. His leadership and the team he has built has given the Board
confidence to make all the investments in not only the existing business, but
also our new ventures.
Business success is not just about strategy. It is about the people, their
attitudes, clarity of purpose and commitment. Empowerment is where people
want to make a difference. Make a difference because they work in an enabling
culture built around good values.
Mark as a leader has done this at The Warehouse Group.
All this achieved in less than 3 years. To me as Chairman, working with Mark
and his team has truly been quite remarkable.
So, as your retiring Chairman you can tell that I am positive about the
future, however, real profit benefits will take time. Now, let's look back
at the 2013 financial year.
2013 Result Overview and Dividend
Sales for the 2013 year were $2.240 billion compared to $1.732 billion last
year.
After adjusting for unusual items, net profit after tax was $73.7 million
compared to $65.2 million in F12.
Operating cash flow in F13 was $93.7 million.
A final dividend of 5.5 cents per share has been declared bringing total
dividends in respect of the 2013 financial year to 21.0 cents per share
compared to 20.0 cents per share in F12.
The final dividend will be paid to shareholders on 12 December 2013.
The Group will continue to review its capital management strategy as a means
to fund further growth initiatives.
Retail Environment
Over the past 12 months we have seen quarterly retail sales showing improving
positive growth.
Although New Zealand's general economic outlook supports strengthening
consumer confidence a number of factors, both domestic and international,
point to ongoing uncertainty and volatility.
We expect we will see gradual on-going improvements in consumer confidence
and spending further supporting the recent retail sales growth trend.
Group Outlook
Earnings are significantly influenced by the Christmas trading performance
with guidance only provided post-Christmas trading.
While we were anticipating adjusted NPAT in the first half of FY14 to be in
line with the first half of FY13 the Gross Margin pressure we commented on in
our Q1 sales release and our continued investment in the business is likely
to result in the first half FY14 adjusted NPAT falling below the first half
of FY13.
We are still expecting adjusted NPAT for the full year of FY14 to be above
the full year of FY13, although by less than we had initially expected.
Subject to any event or material change in trading conditions that may
trigger a continuous disclosure obligation, earnings guidance will be
provided at the time of the half year result announcement in March 2014.
ENDS
End CA:00244152 For:WHS Type:ADDRESS Time:2013-11-22 09:30:10
