3 Mar 2010

Pumpkin Patch half year profit jumps

7:09 am on 3 March 2010

Childrenswear retailer Pumpkin Patch has lifted its half year profit by 50% by boosting margins and closing its unprofitable US stores.

The company made a $14.26 million profit in the six months to the end of January, compared to $9.5 million in the same period the previous year. Revenue rose 8% to $193,988.

Pumpkin Patch chief financial officer Matthew Washington says the increased earnings reflect improved trading conditions across its all its markets.

Mr Washington says operating revenue was hit by higher exchange rates and the closure of loss-making stores in the US, but the improved profit provides a solid base for international growth.

Chief executive Maurice Prendergast says the Australian market will be its bread and butter as it expands its operations.

Mr Prendergast says business in New Zealand will continue to decrease as it opens more stores in Australia, as well as moving into China, Lebanon, Malta and Thailand.

"We've got 16% of our turnover here, it's a very low portion of our total sales," he says.

"I guess what we are highlighting to the market is more an Australian player than a New Zealand player."

Maurice Prendergast says since the company has taken over some the stores owned by its UK rival Adams Kids, after it went into administration in January.

And it will also open its first full store in China in April, after it signed a management deal with a major Chinese retailer who it will not name yet.

"China's going to be an important market for us in the long term. We don't expect to have massive profits and we are certainly not anticipating any vast roll out into China, but we've spent a long time choosing our partner there."

Pumpkin Patch has declared a dividend of 4.5 cents a share - compared to 3 cents for the same time last year.