9 Sep 2012

TWH says tough year ahead but expects profit boost

7:29 pm on 9 September 2012

The Warehouse is anticipating another tough trading year but expects its profit to rise following initiatives to turn its business around.

The company made $89.9 million in the year to the end of July, an increase of 15% compared with the previous year.

But excluding one-off items and unrealised charges, the discounter's underlying profit fell 14% to $65.1 million.

Sales across its general merchandise Red Sheds and stationery Blue Sheds grew 4% to $1.7 billion.

Sales at stores open for more than a year, a key indicator, grew 2.6%.

The Warehouse has struggled in recent years due to subdued household spending and stronger competition, and has expanded its product range and cut costs to boost earnings.

Last year the company overhauled its business, refitting shops and employing 300 more staff on its shop floors.

Chief executive Mark Powell will not give specific guidance for the 2013 financial year but he does expect profit to be bigger than in 2012.

Mr Powell says The Warehouse is looking at different channels to shift its products and aims to triple the number of online customers in the next five years.

The Warehouse declared a dividend of 6.5 cents a share.