KMD
22/03/2016 09:28
HALFYR
PRICE SENSITIVE
REL: 0928 HRS Kathmandu Holdings Limited
HALFYR: KMD: Media Release 1H FY2016 Interim results
Kathmandu Holdings Limited
FY2016 first half results
o Sales increased by 9.3% to NZ$196.0m
o Gross profit increased by 15.8% to NZ$123.1m
o Gross margin increased from 59.3% to 62.8%
o EBIT increased to NZ$15.1m from NZ$0.6m
o NPAT increased to NZ$9.4m from a loss of NZ$1.8m
Kathmandu Holdings Limited (ASX/NZX: KMD) today announced earnings before
interest and tax (EBIT) of NZ$15.1 million for the six months ended 31
January 2016, an increase of NZ$14.5 million compared with the prior
corresponding period. Net profit after tax (NPAT) of NZ$9.4 million was an
increase of NZ$11.2 million over the first half of FY2015.
Summary of Results
1H FY16 1H FY15 Change Change
NZD $m NZD $m NZD $m %
Sales 196.0 179.4 16.6 9.3%
Gross Profit 123.1 106.3 16.8 15.8%
EBITDA 21.9 6.8 15.1
EBIT 15.1 0.6 14.5
NPAT 9.4 (1.8) 11.2
Chief Executive Officer Xavier Simonet commented:
"The results for the first half of FY2016 were in line with our expectations.
Operating margin improvement was achieved as a result of increased full price
sell through combined with implementing planned cost efficiencies."
Sales, Store Numbers, Gross Margin and Inventory
Sales Growth
Same store sales growth was recorded in all markets and was supplemented by
expansion of the store network in Australia and New Zealand.
Total Sales Total Sales Growth Same Store Sales Growth
NZD $m Local currency NZD Local currency NZD
Australia 124.2 8.9% 11.7% 4.3% 7.0%
New Zealand 68.2 4.6% 4.6% 3.1% 3.1%
United Kingdom 3.6 1.6% 19.1% 1.5% 18.9%
Total 196.0 7.2% 9.3% 3.8% 5.8%
Note: Same store sales are for the 26 weeks ending 31 January 2016.
Online Sales Growth
Online sales grew strongly in all countries, with overall growth of c. 23%
resulting in online sales making up 6.6% of total sales.
Store Openings
Kathmandu opened four new stores in the first half of FY2016, three in
Australia, and one in New Zealand.
Gross Margin
Gross margin improved 3.5% pts from 59.3% in 1H FY15 to 62.8% in 1H FY16.
Improved full price sell through along with initial actions taken to optimise
pricing and promotional activity contributed to this increase. It is expected
that gross margins in 2H FY16 will come under increasing pressure as USD
hedging matures at less favourable rates.
Inventory
Total inventory increased by 6.2% (NZ$6.0m) on 1H FY15 and by 2.9% on a per
store basis at actual exchange rates.
1H FY16
NZD $m 1H FY15
NZD $m Change
NZD $m Change
% Change
per store %
Inventory
103.3
97.3
6.0
6.2%
2.9%
The monetary value of inventory on hand increased due to appreciation of the
USD. In terms of units available for sale vs last year, there were c. 9%
fewer stock units on hand as at 31 January 2016.
Operating Expenses
Operating expenses increased by NZ$1.8m but decreased by 3.8% as a percentage
of sales compared to 1H FY15.
Rent grew by NZ$3.7m reflecting the full year impact of stores opened during
FY2015 and new stores opened in 1H FY16.
Other operating expenses (inclusive of net UK store exit costs) decreased by
NZ$1.9m or 4.5% as a percentage of sales, with efficiencies achieved in
advertising and distribution following a structural review which targeted
cost savings of c. NZ$7.0m during FY2016. Non-recurring expenses of NZ$1.0m
were incurred for net UK store exit costs and support office restructuring.
Operating expenses (excluding depreciation)
NZD $m 1H FY16
NZD $m 1H FY15
Rent 29.0 25.3
% of Sales 14.8% 14.1%
Other operating expenses 72.3 74.2
% of Sales 36.9% 41.4%
Total 101.3 99.5
% of Sales 51.7% 55.5%
Other Financial Information
Capital expenditure increased by NZ$3.1m compared to the prior corresponding
period due to investment in distribution capacity in Australia, which was
offset by a reduction in core systems investment (project completed in 1H
FY15).
Operating cash flow was NZ$30.0m higher than 1H FY15 with improved cash
conversion. Gearing decreased from 1H FY15 and remains conservative.
NZD $m 1H FY16
NZD $m 1H FY15
Capital Expenditure 12.9 9.8
Operating Cash Flow 24.2 (5.8)
Net Debt 66.8 85.5
Net Debt: Net Debt + Equity 17.9% 22.6%
Interim Dividend
An interim dividend of NZ3.0 cents per share will be paid to shareholders on
the register as at 3 June 2016. The dividend will be unfranked for Australian
shareholders and fully imputed for New Zealand shareholders.
Outlook
Chief Executive Xavier Simonet commented:
"While it is good to be on track with our plan for the first half, as in
every year, the full year result is highly dependent on the sales and margin
achievement in our Easter and Winter campaigns. We have just commenced our
Easter Sale so it is too early to provide an update on this promotion.
We remain committed to offering great value, innovative, distinctive and
quality products to our customers and providing a seamless shopping
experience whether instore or online.
I am excited about the opportunities for Kathmandu to further expand into
international markets and our profitable Australasian business is providing
the foundation for this.
Sustainable growth requires continued cost efficiencies and leveraging
existing investments and this will remain a strong focus for management in
FY2016 and beyond.
We reconfirm our stated FY2016 full year net profit after tax guidance of
NZ$30.2m."
End CA:00279634 For:KMD Type:HALFYR Time:2016-03-22 09:28:28
