Country Road (CTY) meanwhile is resuming paying dividends with an interim of 17.9c a share, which will please the big two shareholders and anyone still hanging on in the company.
That was after a 72% lift in interim profit to $38 million, for the six months to December 28, to $442 million, thanks to the positive impact of the acquisition of Witchery and Mimco in late 2012.
Sales in Australasia jumped 29% while in South Africa they were up 15% (both on a topline basis).
Comparable store sales for Australasia rose 5.5%, and 13.6% in South Africa off a smaller base.
But the company said the impressive surge in first half profits would slow in the current half because the September 2012 acquisitions helped boost the June half earnings last year.
“The retail landscape in Australasia and South Africa in the second half of this financial year is likely to remain highly competitive with consumer and business confidence remaining cautious and the arrival of more new market entrants in Australia,” the company said in a statement to the Australian Securities Exchange.
Total sales growth for the group was up 27.4% from the previous corresponding period, lifted by the inclusion of Witchery and Mimco, whose numbers are effective from the acquisition date of September 29, 2012.
Comparable sales growth rose 6.6%, which was a solid performance.
Country Road gave a big hint of the improvement in profits in its first half sales update on January 16.
Because the shares are so thinly held, the result is really academic for most investors. Complicating matters is the impact of the acquisitions on sales and earnings.
Country Road’s position will become clear this half because the acquisitions contributed to the second half performance in 2012-13.
But looking at their impact through 2013, there’s a big surge in sales (50% on a topline basis or 10.7% on a comparable store basis for the December 2013 half year).
That update was issued in January 2013 and the impact on sales growth then slowed over the remaining 12 months.
As the company warns, the impact will fade this half year and by the start of 2014-14 the spike will have gone.
But what the update does show is that for some retailers there is growth – Country Road is one of our few home grown near luxury labels and it has seen an improving trend in the past couple of years.
We already know that The Reject Shop and Super Cheap are going to report very weak results.
But Country Road and JB Hi–Fi do not make a trend.
