Shares in outdoor clothing chain Kathmandu were halted yesterday to allow a multi million dollar fund raising to take place that will finance most of the acquisition of US footwear company Oboz for $US60 million ($78 million).
News of the purchase and fund raising came with the news that Kathmandu had turned in one of the best interim results among Australasian retailers with profits up 23%.
The shares had closed at $2.30 on the ASX on Monday.
Net profit jumped by $NZ2.3 million to $NZ12.3 million while an unchanged interim dividend of 4 NZ shares was declared.
The dual-listed Australian and New Zealand retailer had grown earnings by hitting the balance between growing sales and improving its profit margin, chief executive Xavier Simonet said.
“Sales momentum improved through the end of the Christmas trading period and into February and March,” he said in yesterday’s statement.
“Our financial position continued to strengthen during the first half year and we ended the period with healthy inventory and record low half-year net debt."
Total sales grew 3.7% in Australia and 1.9% on a same-store basis, which strips out the effect of stores opening and closing.
But in New Zealand they fell 6.4% in gross terms and 6.3% on a same-stores basis, which the company said was due to lower levels of clearance stock in the first quarter and a warm Spring and summer.
Sales had bounced backed in the last six weeks of the half to 1.9%, however.
In a trading update, Kathmandu said same-store sales in the six weeks to March 11 grew 7.5% in Australia, and 5.1% in New Zealand.
Kathmandu said the Oboz purchase would be funded through a fully underwritten $NZ40 million placement of ordinary shares, and a non-underwritten $8 million share purchase plan. The rest would come from cash on hand and existing bank facilities.
As well as the initial $US60 million, there’s an additional $15 million earn-out if Oboz reached its financial milestones.
