SCY
28/06/2012 10:34
FLLYR
REL: 1034 HRS Smiths City Group Limited
FLLYR: SCY: SMITHS CITY BOOSTS PROFIT AND DIVIDEND
Smiths City Group Limited
Audited Full Year Result To 30 April 2012 For Announcement To The Market
Current reporting period: 12 months to 30 April 2012
Previous reporting period: 12 months to 30 April 2011
Amount
$000 Percent change
Revenue from ordinary activities 222,553 0.8%
Profit from ordinary activities after tax attributable to security holders
4,375
131.2%
Net profit attributable to security holders 4,375 131.2%
Amount per security
Final dividend; year to 30 April 2012 2.5 cents
Imputed amount per security 0 cents
Record date 3 August 2012
Dividend payment date 10 August 2012
Earnings per security Current year Prior year
Basic EPS (cents) 8.28 3.57
Net tangible Assets per Share (cents) 76.66 81.79
Preliminary full year report on consolidated results (including the results
for the previous corresponding full year) in accordance with Listing Rule
10.4.2.
This financial result, which has been audited, has been prepared in
accordance with New Zealand International Financial Reporting Standards,
which is consistent with the prior full year.
Smiths City Group Limited has a formally constituted Audit Committee of the
Board of Directors.
27.6.12 - FULL YEAR RESULT ANNOUNCEMENT
SMITHS CITY BOOSTS PROFIT AND DIVIDEND
The Directors of Smiths City Group Limited, the Christchurch based retailer,
have announced an operating surplus after taxation for the 12 months to 30
April 2012 of $4.375million more than double last years $1.892million result.
Operating revenues for the 12 months increased 0.8% from $220.7million to
$222.5million.
The Directors have declared an unimputed final year dividend of 2.5cent per
share (last year 1.0cent) to be paid on Friday 10 August 2012. The dividend
will be paid to those shareholders on the Share Register at 5.00pm Friday 3
August 2012.
Smiths City has available carry forward tax losses of $11.4million, hence no
tax is payable. The deferred tax credit recognises the movement in the
company's estimates of future taxable profits on the basis these can be
offset against the tax losses available.
Commenting on the result Chairman Craig Boyce said "The Board of Directors
are very pleased to report a strong increase in trading profit and an
increased dividend to shareholders in what has been a challenging 12 months.
Trading in the South Island outside of Christchurch was positive as the
company had the advantage of a strong rural sector with good weather,
production and export prices. The North Island was more subdued. However
company returns were in line with expectations.
Christchurch itself is a significant part of the company's business and the
February 2011 earthquake had a substantial impact on the years activities.
During the year the company concentrated on rebuilding its Christchurch
operations - in particular, the Colombo Street retail store - and focussed on
taking advantage of the sales opportunities that arose as a result of our
stores continuing to trade while other stores in our retail sectors remained
closed. Being able to do this was partly a result of the effectiveness of
the disaster recovery plan executed in February following the earthquake.
Given its current footprint in Christchurch, which includes a new division
set up to service the commercial market, the Board sees a significant upside
in its Christchurch operations as the city rebuilds.
The Colombo Street, Christchurch property is a major asset to the Group and
prior to the February earthquake housed the company's largest retail store,
its administrative office and five properties leased by third parties. The
older section of the building suffered severe damage and consequently
required demolition and redevelopment. As at balance date the remainder of
the building had been repaired and the Smiths City retail store up and
trading in a footprint smaller than prior to the earthquake. The
administrative complex and four adjacent properties have been demolished and
not yet rebuilt. Consequently, as at balance date, approximately 65% of the
pre-earthquake total space is in use and this is reflected in the property
valuation used in the balance sheet. The methodology and rationale for the
valuation are explained fully in Note17 to the accounts.
The Directors are currently reviewing several options for the redevelopment
of the site and will review all options in detail to ensure the redevelopment
maximises the value to shareholders from the site taking into account that we
were fully covered by insurance for replacement."
Managing Director, Rick Hellings, added "Whilst the events in Christchurch
have thrown up their challenges, the results reflect the efforts of everyone
in the Group.
The ability to hold sales at prior year levels in spite of having the Smiths
City Colombo Street (for six months) and Powerstore Moorhouse Avenue (for the
full 12 months) closed shows the strength of the brand and the commitment of
the staff over the financial year.
The Colombo Street store reopened in mid November 2011 and sales to date are
exceeding expectations. Customer feedback continues to be positive and this,
together with the performance of the other Christchurch stores, bodes well
for the coming financial year.
The company was fully insured for business interruption and material damage.
Since balance date the Group has renewed its insurance policies including
earthquake cover. Premiums for those insurances managed by the Group have
more than doubled with an increase in annual premiums of about $600,000.
Premiums on properties leased by the Group are expected to increase
substantially and will add to this figure.
Excesses for earthquakes have also increased significantly as, in the event
of an earthquake, they are now calculated on a percentage of the total site
value rather than as a percentage of the actual claim value. Effectively the
company now has a greater exposure in the event of an earthquake - consistent
with the experiences of the commercial sector as a whole.
Outside of Christchurch the strong rural economy enabled the company to
improve returns from the South Island at both sales and profit level. In the
North Island trading conditions were not as strong with the PSA bacteria
impacting the local economy in the Bay of Plenty and uncertainty surrounding
the election impacting the lower North Island, particularly in Wellington.
However, the company has continued to improve its store presentation and
customer offering and the North Island is seen as an opportunity for
increasing returns as we move forward.
In addition to the above, the company has invested in its on-line presence
and all three retail brands - Smiths City, Powerstore and L V Martin - are
now trading on-line. Expanding this to a full multi channel offering is a
priority for the coming financial year.
Finally we wish to record our appreciation of the Smiths City staff,
suppliers, customers and shareholders for their support of each other and the
company during these challenging times."
RICK HELLINGS
MANAGING DIRECTOR
0299833011
End CA:00224370 For:SCY Type:FLLYR Time:2012-06-28 10:34:47
