WHS
21/11/2014 09:56
ADDRESS
REL: 0956 HRS The Warehouse Group Limited
ADDRESS: WHS: Chairman's Address 2014 Annual Meeting
Chairman's Address To The Warehouse Group Limited Annual Meeting
21 November 2014
Welcome to the Annual Meeting of The Warehouse Group Limited.
Since last year's Annual Meeting we have continued the significant reshaping
of the company, establishing a strong platform for growth, positioning our
businesses well for the future.
As part of this journey, in December 2013 we acquired R&R Sport and we have
integrated this business into the Torpedo7 Group along with No1 Fitness and
Shotgun Supplements. We also acquired a further stake in Torpedo7 Limited
bringing our ownership in the Torpedo7 Group to 80%. Recently the Torpedo7
and R&R Sport brands were combined under a new Torpedo7 brand and two new
stores were opened in Mt Wellington and Albany positioning Torpedo7 as a true
"bricks and clicks" retailer.
Another exciting development was the acquisition of Diners Club NZ in March
which provides the base, in line with our strategy, to be a leading NZ Retail
Financial Services Company.
We successfully completed a $115 million capital raising to strengthen our
balance sheet, comprising a $100 million Private Placement and a $15 million
Share Purchase Plan which reflected the prevailing market price.
In our core Red Sheds we have had 14 quarters of positive same-store sales
despite an unseasonably warm winter. This is a result of a turnaround in
customer perception which has required significant investment in our stores,
our products and our people over the last three years.
We have also seen 20 quarters of same-store sales growth in Warehouse
Stationery which has been helped by the rebranding of Warehouse Stationery
around "Work, Study, Create, Connect".
Market leader, Noel Leeming has also just launched its rebranding, based on
delivering the right product at the right price, with leading services,
delivered through passionate people. You may have seen our latest "Maximise
your Machine" advertisements.
All of this would not have been possible without our enthusiastic, engaged
and passionate teams across all brands.
At this time I would like to acknowledge Stephen Small our former CFO who
sadly passed away in May. Stephen was instrumental in formalising a number
of strategic acquisitions and is missed by his Warehouse Group friends,
colleagues and others.
Last year we announced the introduction of the career retailer wage. We are
very proud of the successful introduction of this initiative. We have been
delighted with the positive impact the career retailer wage has had, in
particular the improvement in morale of our team members.
We know that by continuing to invest in our people we will continue to
deliver first-rate customer service and ongoing loyalty across all brands. Of
course, this is only possible if we have the right product at the right price
with the right quality.
We continue to leverage our scale and build our competitive advantage
including through the ongoing development of key strategic supplier
relationships and leveraging our group sourcing expertise and logistics
capabilities.
We know that customers are more savvy, using technology to research potential
purchases across a variety of retailers, both here and overseas. This
presents challenges and opportunities and therefore is a significant area of
focus for the Board and management. Our aim of becoming New Zealand's
leading multichannel and digital retailer enables us to offer customers new
ways to obtain the best bargains as we continue to move through this digital
transformation.
The core Warehouse business was started 30 years ago by our Founder Sir
Stephen Tindall and has continued to evolve, particularly in the last few
years.
We have established the building blocks for the reshaped organisation to
become a "100 year company" capable of meeting the challenges of a very
competitive and dynamic retail environment.
We will continue to consolidate and build on the momentum achieved while
continuing to deliver today for shareholders and other key stakeholders.
I would like to thank my fellow directors, Mark Powell and all team members
for their contribution this year. I would also like to thank everyone who
supports The Warehouse Group: our customers, suppliers, shareholders and the
community for their ongoing commitment to the company
Now, let's look back at the 2014 financial year.
2014 Result Overview and Dividend
Sales for the 2014 year were $2.65 billion compared to $2.24 billion last
year.
After adjusting for unusual items, net profit after tax was $60.7 million
compared to $73.7 million in FY13.
Operating cash flow in FY14 was $76.6 million.
A final dividend of 6.0 cents per share has been declared bringing total
dividends in respect of the 2014 financial year to 19.0 cents per share,
consistent with guidance provided in March 2014.
The final dividend will be paid to shareholders on 11 December.
Retail Environment
The economy grew strongly in the first half of 2014, but the pace appears to
be slowing, particularly with signs of some pressure in the agricultural
sector. Also, households and businesses continue to be mindful of debt.
As a consequence of this we are not factoring any particular tailwinds or
headwinds into our planning.
Group Outlook
As the Group's earnings are significantly influenced by the Christmas trading
performance it is too early to provide specific earning guidance.
Trading over the last few weeks has been softer than our plan, which
emphasises the importance of the upcoming Christmas trading over the next six
weeks. Having said that, our plan for the full year F15 is still to deliver
adjusted NPAT above that of the full year F14, as previously indicated.
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 2015.
ENDS
Ted van Arkel
Chairman
End CA:00257938 For:WHS Type:ADDRESS Time:2014-11-21 09:56:15
