Shares in luxury clothing retailer and distributor, OrotonGroup Ltd jumped more than 14% on Friday after it increased full-year profit 16.1% in the year to July 25.
The shares rose 67 cents to $5.25 at the close after hitting a 52 week high of $5.50 during trading.
Net profit rose to $19.4 million for the 12 months to July 25 compared with $16.7 million in the prior corresponding period, the Sydney-based Oroton said in a statement to the ASX.
Revenue rose 10.6% to $135.6 million during the year as Oroton opened 13 new stores and closed two, taking the total to 70 from 59 at the end of July 2008.
The company said it had opened two further stores since the end of the fiscal year and was planning two more openings during the current half year.
Like for like store sales for the Group rose 8% over 2008, an impressive performance.
But the full year result disguised a second half slowdown, which was contrary to what some other more mass market retailers experienced.
The company said in March that first half net profit was $12.5 million for the six months to January 24, 2009. That was an increase of 20.4% on the 2008 first half result of a profit of $10.4 million.
Revenue increased 11.4% to $74.4 million (HY08: $66.8 million) in the first half.
Like for like store sales performance for the period was 12% for the Group.
From those figures there was a clear second half slowdown, especially as shown in the like for like sales growth rate easing by a third in the closing six months of the year.
But given the trading conditions in the latest half, it was still a very good result, as we saw last week from the much bigger David Jones which battled its way through the period as well.
Oroton will pay a final dividend of 22 cents per share, as well as a special dividend of three cents, taking the full-year distribution to 41 cents, up from 35 cents the year before.
As always the payout, especially the final, is a good guide to how the board sees the coming year.
"Despite the challenging economic environment in fiscal 2009, OrotonGroup has continued to perform well, reflecting on the quality of our brands and the consistent execution of our strategy," chief executive Sally Macdonald said in the statement.
"Whilst we remain vigilant to the macro economic volatility, we believe there are considerable growth opportunities in Oroton to expand our domestic store base, product categories and enter new geographies."
Oroton, which sells leather goods, jewellery and accessories under its own brand, as well as the Polo Ralph Lauren brand under licence, generated operating cash flow of $23.4 million.
Debt-laden Kiwi group, Fisher & Paykel Appliances saw its shares plunge more than 11% Friday after it revealed that it is in talks with lenders over its loan covenants, and may have to write down the value of its American assets.
That news was broken late Thursday after trading and Friday saw the reaction, with the shares falling 7 cents ton 54.5 cents, down 11.4% on the day.
That close is still well up on the 52 week low of 29.5 cents.
The bad news flowed from a profit warning.
FPA said it now expects to make only 40% of the net profit of $NZ32.8 million ($A27.18 million) it forecast for the 2010 financial year, between $NZ20 million ($A16.57 million) and $NZ23 million ($A19.06 million).
That’s despite telling investors only last month it was on track for its forecast profit.
It blamed a weak and competitive US market for its latest problems, and said in a statement that its North American sales in US dollar terms were now forecast to end the year about 12% below the level assumed in May.
"Directors are reviewing the carrying value of assets for any possible impairment," it said in the statement .
(This is the grim reality of the US economy’s true state of health, especially in the housing sector where FPA operates.)
The company said it expected to post a net loss of between $NZ2 million ($A1.66 million) and $NZ5 million ($A4.14 million) this fiscal year, compared with a May forecast of a net profit of $NZ11.7 million ($A9.69 million).
The company’s weaker first-half performance was likely to fall outside an "adverse variance" allowed by its loan covenant with bankers.
It said its banks were supportive, given a steady reduction in its debts, and they were looking to waive compliance for the first half, provided the company’s new budget forecasts met the variance test in December and March.
"The Group’s trading performance for the 6 months ended 30 September 2009 is expected to be outside the 20% permitted adverse variance under the budget performance covenant agreed with its Banking Syndicate. The Company is in compliance with all other Bank covenants," FPA directors said.
"The Company has had discussions with its Banking Syndicate.
"The Banks have requested internal credit approvals to waive compliance with the budget performance covenant at 30 September 2009 whilst accepting a revised budget against which the budget performance covenant will be tested as at 31 December 2009 and 31 March 2010.
"Given the substantial debt reduction and deleveraging that has occurred to date and is projected to occur through to 31 March 2010, the Directors expect that the revised forecast and covenan
