Wednesday, September 29, 2010

Allan Hubbard Saga: Will He Walk?

With the third Grant Thornton Report due out sometime today or tomorrow on the details surrounding the statutory management of nearly a dozen Allan Hubbard charitable trusts and businesses and a decision due within weeks from the Serious Fraud Office (SFO) over possible fraudulent business practices on the part of Mr Hubbard and the business that he had financial and personal control over, it is looking doubtful as to whether Mr Hubbard is going to have to answer to his crimes.

I say this not because he hasn't committed fraud or been responsible for hoodwinking investors and taxpayers because he clearly has. The reason that I say what I am saying is that the track record for the SFO, the Securities Commission and a whole host of other financial regulatory bodies has been poor when it comes to actually prosecuting the perpetrators of financial crimes.

Just yesterday a Partner of Ernst & Young was found guilty for breaches in accounting disclosures for Feltex Carpets. Feltex Carpets directors all walked away scott free. Of the directors and CEOs of failed finance companies that have been brought to court, we have seen a myriad of them walk away from court proceedings either without any censure or with a small fine or a slap on the hand with a dry bus ticket.

Nobody has gone to jail, nobody has had a serious fine and it looks likely that nobody will.

These are the Hotchins, the Watsons the Bryers et al.

Of course this is unacceptable to most of us. These financial criminals have ripped off investors, through fraud, subterfuge and their own base greed, many investors have lost all they had and their lives are ruined and some have even taken the final solution.

The Allan Hubbard case appears to be no different. He has been rightly tarred with the same brush as the aforementioned and has the ignominious position as one of the few of these criminals to end up costing the taxpayer billions of dollars as his empire collapsed around him.

I would like to think that this case might be different and that Mr Hubbard and his fellow directors will be doing prison time for their misdeeds but either laws surrounding our financial regulatory regime are weak (they clearly are in my opinion) and or the prosecutors within our various financial regulators are sub-par.

Either way Mr Hubbard stands a good chance of getting away with his swindle even if he is found guilty of the accusations to be brought against him over the coming days and weeks.

Lets hope not.

Related Share Investor Reading

Download Grant Thornton Report 1
Download Grant Thornton Report 2

Allan Hubbard Saga: No Longer Bothered by Botherway
Allan Hubbard Saga: 60 Minutes Interview, Sept 23 2010
Allan Hubbard Saga: Supporters head to the exit door
Allan Hubbard Saga: Threats & the Mysterious PWC Report
Allan Hubbard Supporters: Conflict of Interest
VW Veneer reveals BMW heart
VIDEO: Jenni McManus Explains Allan Hubbard Collapse
Allan Hubbard Statement on SCF Receivership
VIDEO: Sandy Maier - full news conference on SCF Receivership
Market Alert: South Canterbury Finance to be placed in Receivership
Allan Hubbard: Ignorant Supporters Blissfully Unaware
Thornton Report 2: Allan Hubbard Guilty as Charged
Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report: Allan Hubbard's Aorangi Securities
Whatever happened to? Muriel Dunn
Bothered by Simon Botherway
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same
Jane Diplock Q & A Interview
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


Recommended Fishpond Reading


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c Share Investor 2010

Monday, September 27, 2010

Hallenstein Glassons Ltd: Should I stay or should I go?



The Hallenstein Glasson Holding Ltd [HLG.NZX] 2010 full year profit out today has managed to push shares in the company up by 12c to $4.24 at time of writing and it looks like the attached dividend of 17c will see a very good rise in stock price as short term dividend strippers come in for a quick buck. The rise in the HLG stock price has outstripped the rise in the NZX50 index (see chart above)

The share price at current levels (see 21 year chart below) has reached 2 years highs not seen since the pre-2008 stockmarket crash but is still well off its all-time high of around $5.75 (way too high) reached back in late 2006. It reached a low of not much more than 2 bucks in 2009 -way too low.

My very small investment in HLG began in July 2008 when I bought 1000 shares at $2.53 and since then if you include the increase in share price, dividends and tax credits I have had almost a 100% return in just over 2 years.

A pretty good return in the midst of the worst recession in my lifetime and time to have a look to see if this stock is worth selling.

My investment model rests on long-term returns but if somebody is willing to offer me good money for my shares after having had a n excellent return on my investment then who am I to argue?

I err on the side of holding, because the company is well managed and pays a very good dividend but anything north of 5 bucks will get me online to the broker for a sale.

I will let you know what happens.




Hallenstein Glasson @ Share Investor

Mixed Retail Outlook
Long Term View: Hallenstein Glasson Holdings Ltd
The History Of: Hallenstein Glasson Holdings Ltd
Hallenstein Guidance not indicative of wider retail recovery
Stock of the Week: Hallenstein Glasson
Hallenstein Glasson Australian expansion needs expert execution
Why did you buy that stock? [Hallenstein Glasson]

Discuss HLG @ Share Investor Forum

Download HLG Company Reports
Download HLG Company History


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c Share Investor 2010

Sky City set to lose National Convention Centre bid

For all intents and purposes the possibility of Sky City Entertainment Group Ltd [SKC.NZX] getting the go ahead from politicians for the right to build and operate a National Convention Centre with the benefit of taxpayer money and all the business that would bring to the SKC gaming floor is pretty much dead and buried.

I have easily come to this conclusion because over the last week Mayoral candidates John Banks and Len Brown have both come out and backed the new Auckland "Supercity" and its bid for a convention centre in and around the Aotea Centre.

The Sky City and council bids are 2 of 5 that are bidding to build the national Convention Centre, at a cost of around $400 million, but politics has taken over sense in the Mayoral race because it wouldn't be seen as "fair" to subsidise a company like SKC for them to build an asset that they would benefit from - after all it is a big bad casino!

The thing is though, any winner in the race to build a convention centre would get the benefit of the taxpayer subsidy so the issue of favouritism would only be one of Council vs private business and this argument was won by private business many decades ago. Private business always does it better.

The only other arguments that remain are which is the best site and what will be the running costs be.

I agree with the NZ Herald that the best convention site would be a central city one, so that rules out the the ASB Showgrounds bid at Greenlane. A Ngati Whatua proposal for Quay Park, alongside the Vector Arena, and an Infratil Ltd [IFT.NZX] bid for the Wynyard Quarter .

The Herald is wrong about picking the council development though.

Sky City is the most appropriate site in terms of its centrality to the city and its amenities.

It is close to all the best hotel rooms, including Sky's almost 1000 rooms and its 3000 carparks, close to the tourist area of the Viaduct harbour, close to the best restaurants in Auckland, central to most public transport routes and motorways and the easiest to develop because of the sites undeveloped nature.

The big plus though will be the ongoing subsidisation by Sky City for the running costs of the convention centre, which will run into many 10s of million per annum. Of course if the council bid wins, these costs will be bourne by the Auckland ratepayer and they are clearly substantial.

Convention Centres do not make money as a standalone businesses and the justification for them being built is that they "bring custom to the city and surrounding businesses". This is the main reason that both Sky City and the council want to build their respective convention centres.

In my opinion then, the best place for a National Convention Centre is at the Sky City Complex. It will cost the taxpayer and ratepayer less initially and the ongoing cost savings would be the biggest advantage. It is also is in the best most central site, that is probably the most recognised man made icon in Auckland from just about every part of the city.

It looks like the Auckland City Council bid is locked and loaded though and that is a missed opportunity that will cost Auckland ratepayers dearly for many more years to come.


Disclosure
: I own SKC shares in the Share Investor Portfolio


Sky City Convention Centre @ Share Investor

Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
SKC Convention Centre power-point slide illustrations & SKC submission to Auckland City Council


Sky City Entertainment Group @ Share Investor


Sky City Entertainment Group: Australian Acquisition on the Cards?
Sky City Entertainment Group Ltd: 2010 Full Year Profit Analysis
Sky City Entertainment Group 2010 Full Year Profit Preview
Chart of the Week: Sky City Entertainment Group Ltd
Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Share Investor Q & A: Sky City CEO, Nigel Morrison
Sky City Entertainment: CEO Nigel Morrison discusses 2010 HY
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
Sky City Entertainment Group Ltd: Download full Company analysis
Sky City 2010 full year profit looking good
Long Term View: Sky City Entertainment Group Ltd
Sky City Entertainment: CEO Nigel Morrison discusses 2010 Half Year
Sky City Entertainment Group 2010 Interim Profit Review
Sky City to focus on Gaming
Sky City debts levels now more manageable
Insider Trading on Sky City shares
Sky City Profit Upgrade: Always on the Cards
Sky City's Current Cinema "Boom" a Horror Story in Disguise
Stock of the Week: Sky City Entertainment Group
Are Insiders selling Sky City Stock?
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City share offer confusing and unfair for smaller shareholders
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

Discuss SKC @ Share Investor Forum

Download SKC Company Reports


From Fishpond.co.nz

Bird on a Wire: The Inside Story from a Straight Talking CEO

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Fishpond


c Share Investor 2010

Friday, September 24, 2010

Kathmandu Holdings Ltd: 2010 full year profit analysis

The Kathmandu Holdings Ltd [KMD.NZX] 2010 Full Year Profit result out this morning is hard to fathom clearly because last years profit as disclosed in the 2009 Prospectus was a corrected pro -forma figure and this year profit figure has been impacted by IPO costs and associated listing costs.

The headline net profit of $25.2 million before IPO costs compares with the 2009 pro-forma net profit of $10.3 million. likewise the headline sales figure for FY 2010 was $245.8 million compared to 2009 $215.6 million.

Key Points

* Headline profit of $25.2 million compares well with $10.3 million (before adjustments for IPO costs and adjustments for comparison of 2009/2010)

*Missed most key prospectus forecasts.

*15 stores opened.

*Gross margins down.

*Dividend of 7c per share.

*Debt well down on last year (paid off from partial proceeds of IPO)

*Capital expenditure up on 2009.


Lets go by KMDs own preferred comparison though (hidden at the bottom of their release), which while hard still to get an accurate comparison year to year, because both 2010 and 2009 figures have been "adjusted" is probably the most relevant way of looking to see how they did in 2010.

2010 | 2009

Sales 245.8 240.0 5.8 2.4%
EBIT1 47.5 50.6 (3.1) -6.1%
NPBT pro-forma2 41.2 44.8 (3.6) -8.0%


1 Excluding IPO costs

So we can see that even with their own adjusted figures (which are not 100% accurate) that Kathmandu failed to hit key targets listed in their prospectus, only just beating last years sales figures by round $6 million.

The 2010 net profit then, along with other financial indicators in today's release make it hard to compare 2010 with 2009. For shareholders this means uncertainty on how well the company is accurately doing and they will only get some certainty in 12 months from now when figures can be more easily compared like for like.

On the year ahead and much like Briscoe Group Ltd [BGR.NZX] & The Warehouse Group Ltd [WHS.NZX] last week, CEO Peter Halkett concluded the 2010 profit release by saying that:

“Kathmandu is confident that given reasonable economic conditions there will be further improvement in profitability in the year ahead. The impact of the economic environment on consumer confidence, and cost pressures both domestically and internationally are a challenge, however given our market position and brand strength we remain well placed to continue our growth."

Unfortunately for shareholders Halkett seems to favour more store building over organic growth and this will come at the expense of higher capital costs, increased rental payments and possibly impact on gross margins as the company looks to focus on volume rather than quality.


Kathmandu @ Share Investor


Chart of the Day: Kathmandu Holdings Ltd
Kathmandu Holdings: Market Update Misleads
Kathmandu's 2011 Results Under Pressure from Jan Cameron
Kathmandu IPO: Prospectus Analysis
Kathmandu IPO: Jan Cameron lands a blow to IPO
Kathmandu IPO: What is it worth?
Kathmandu IPO: Retail Interest High
Kathmandu IPO: A tough mountain to climb
Kathmandu No.1 but IPO should get the Bullet
Download the detailed Kathmandu Value Cruncher Report - Requires free registration at Share Investor Forum to download
Download Kathmandu IPO Prospectus
KMD Investor Presentation to Macquarie

Discuss Kathmandu @ Share Investor Forum
Download KMD Company Reports


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c Share Investor 2010

Allan Hubbard Saga: No Longer Bothered by Botherway

The following is a meaculpa of sorts to Simon Botherway, a man entangled in what was perceived as a conflict of interest on his part over the Statutory Management of a couple of Allan Hubbards financial entities back in June 2010.

I wrote this back in June:

Mr Botherway and his SEC have been of course behind the statutory management of Allan Hubbard and his Aoarangi Securities, a crackdown which has apparently come out of the blue and inconsistent with the SECs track record in terms of the aforementioned bus ticket slapping.

It turns out that this is where things get really interesting in terms of Mr Botherway and his capacity as the a SEC board member. Stuff.co.nz has reported this morning that Mr Botherway has a conflict of interest of his own when it comes to his recommendation to send Mr Hubbard to Coventry:

A member of the Securities Commission (Mr Botherway) which recommended Allan and Jean Hubbard be placed in statutory management is also the brother of a businessman placed in receivership by South Canterbury Finance (SCF) last year. Stuff.co.nz

Allan Hubbard is the owner of SCF.

Mr Bothwerway only disclosed his conflict yesterday:

Commission member Simon Botherway yesterday declared he had a "potential conflict of interest" in the Hubbard case as the brother of businessman Jonathan Botherway.

Jonathan Botherway's hospitality empire collapsed in July 2009 after SCF, which was then owed $7.8 million, put him in receivership.

Simon Botherway would not comment yesterday and instead referred questions to the commission. Shareinvestor Blog, June 25, 2010

Well, it turns out stuff.co.nz and by implication myself, was wrong and wish to apologise to Simon for implicating him at all.

I am now aware of the facts over this perceived conflict and am now convinced that there is very little to it. My anonymous source assures me the following is accurate and I have no reason to doubt this source.

This is why:

* South Canturbury Finance did not put Mr Botherway's brother into receivership as is widely accepted in the majority of media reports.

NZB (NZ Breweries) appointed a receiver on Friday 26th of June 2009. Their receivers sent a fax to SCF about 11am that morning giving them until 2pm to respond, SCF had no option but to appoint their own receivers to Merivale Ale House (Auckland Bars).

A week later PWC advised SCF to place the South Island bars in receivership so they could control all the businesses.

Read the publicly available Receivers Report

* Botherway did not receive the anonymous letter of complaint (from an Aorangi investor to the Securities Commission) and has not actually seen it. Hubbard's supporters have claimed he has.

The investigation was led by the Companies Office and to the knowledge of my source* there were no Sec Com staff involved in it, and there were no Members of the Commission involved).

*Botherway didn't author any report on Aorangi or any of the other parties recommended for Statutory Management as widely reported and pushed by Hubbard supporters.

This apparent conflict has been the red hearing for Allan Hubbard supporters, and they have been using David Cunliffe, in parliament and on his own facebook page to go after Botherway. It has turned into a political muck-raking situation now for Labour in their pursuit of National over South Canterbury Finance but as we know the facts of the case in David Cunliffe's eyes are only as good as the information being supplied to him from Allan Hubbard Supporters. That information is clearly inaccurate at best and a complete fabrication at worst.

Cunliffe is of course using parliamentary privilege to divulge this stuff and he is clearly misleading the house.


* Wishing to remain anonymous but a credible source.

Related Share Investor Reading

Download Grant Thornton Report 1
Download Grant Thornton Report 2

Allan Hubbard Saga: 60 Minutes Interview, Sept 23 2010
Allan Hubbard Saga: Supporters head to the exit door
Allan Hubbard Saga: Threats & the Mysterious PWC Report
Allan Hubbard Supporters: Conflict of Interest
VW Veneer reveals BMW heart
VIDEO: Jenni McManus Explains Allan Hubbard Collapse
Allan Hubbard Statement on SCF Receivership
VIDEO: Sandy Maier - full news conference on SCF Receivership
Market Alert: South Canterbury Finance to be placed in Receivership
Allan Hubbard: Ignorant Supporters Blissfully Unaware
Thornton Report 2: Allan Hubbard Guilty as Charged
Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report: Allan Hubbard's Aorangi Securities
Whatever happened to? Muriel Dunn
Bothered by Simon Botherway
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same
Jane Diplock Q & A Interview
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


Recommended Fishpond Reading


Crisis: One Central Bank Governor and the Global Financial Collapse

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c Share Investor 2010

Thursday, September 23, 2010

VIDEO INTERVIEW: Pumpkin Patch CFO Matthew Washington


Source: TVNZ

An interview with Pumpkin Patch Ltd [PPL.NZX] CFO Matthew Washington, after yesterday's 2010 Full Year Profit release.

Of particular interest is news that the company look to be opening 22 new stores over the coming year and a focus on a new brand, Charlie and Me, a stand alone store that will sell a products that Pumpkin Patch stores to not currently sell - i.e: cheaper children's clothing.

Matthew sounds just a touch bullish here. Wish I could share his enthusiasm on where retailing is going over the next year or two.


Disclosure I own PPL shares in the Share Investor Portfolio.


Pumpkin Patch @ Share Investor

Pumpkin Patch Ltd: 2010 Full Year Profit Analysis
Pumpkin Patch Ltd move downmarket
Long Term View: Pumpkin Patch Ltd
Pumpkin Patch's North American Downsizing a Prudent move
Digging at Pumpkin's Profit
Long vs Short: Pumpkin Patch Ltd
Pumpkin Patch Buyback shows Confidence in the Future
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Pumpkin Patch ripe for the picking
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Discuss PPL @ Share Investor Forum

Download PPL Company Reports

Buy Pumpkin Patch Clothing

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Bird on a Wire: The Inside Story from a Straight Talking CEO

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c Share Investor 2010

VIDEO: Extended Ian Morrice Interview



Source: TVNZ


An extended interview with CEO of The Warehouse Group Ltd [WHS.NZX] Ian Morrice last week after the 2010 Full Year Profit release and my interview with him.

With Nadine Chalmers -Ross they cover everything from the profit release to where the company maybe going in the future, and everything else in between.

Nadine is shaping up to be one of NZ's best financial interviewers


Warehouse Group Ltd: 2010 Full Year Profit Analysis
Share Investor Q & A: Questions to The Warehouse' Ian Morrice
Long Term View: The Warehouse Group Ltd
Share Investor Short: Warehouse Group yield worth a look
The Warehouse Group: 2010 Interim Profit Review
The Warehouse: Big Brands, Big Opportunities
Warehouse strike opportunity to buy
Long Term Play: The Warehouse Group
Share Investor Short: Warehouse Group yield worth a second look
Woolworths supermarket consolidation an indicator of a move on the Warehouse?
Stock of the Week: The Warehouse Group
Warehouse 2009 interim profit a key economic indicator
When will The Warehouse bidders make their move?
Long vs Short: The Warehouse Group
Warehouse bidders ready to lay money down
The Warehouse set to cut lose "extra" impediment
The Warehouse sale could hinge on "Extra" decision
The case for The Warehouse without a buyer
Foodstuffs take their foot off the gas
Woolworths seek leave to appeal to Supreme Court
Warehouse appeal decision imminent
Warehouse decision a loser for all
Warehouse Court of appeal decision in Commerce Commission's favour
MARKETWATCH: The Warehouse
The Warehouse takeover saga continues
Why did you buy that stock? [The Warehouse]
History of Warehouse takeover players suggest a long winding road
Court of Appeal delays Warehouse bid
The Warehouse set for turbulent 2008
The Warehouse Court of Appeal case lay in "Extras" hands
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Discuss WHS @ Share Investor Forum - Register free

Download WHS company reports

Shop online at The Warehouse


Buy Toughen Up: What I've Learned About Surviving Tough Times

Toughen Up: What I've Learned About Surviving Tough Times

Toughen Up - Fishpond.co.nz


c Share Investor 2010

Allan Hubbard Saga: 60 Minutes Interview, Sept 23 2010 (UPDATED)

3 News Video On Demand

Source: TV3


In a 60 minutes interview with Allan Hubbard last night Hubbard claims an anonymous unsigned letter was the only reason Hubbard Management Funds and Aorangi Securities were put into statutory management and that he put $40 million of his own money into the latter to keep it afloat.

These two claims I now know are falsehoods and there will be more about that from this blog around these and other falsehoods, over the next week or so. There have been other complaints and any assets Hubbard says he put into either of these two entities were worthless and or wrapped up in inter party lending complications.

I feel sorry for the investors in those companies but like Allan they are blaming everyone else but the man responsible, Mr Hubbard.

Hubbard blames everybody else as well and specifically his fellow directors for not letting him invest in the stockmarket. He claims they wanted to invest in the property deals that ultimately led to the collapse of his empire.

The 60 minutes piece was filmed in Timaru during last weekends hubbardfest led by Paul Carruthers, formerly of the Standby Hubbard Support group.

A soft interview, without thorough investigation, designed to make Allan Hubbard look good.

Poor journalism.

Related Share Investor Reading

Download Grant Thornton Report 1
Download Grant Thornton Report 2

Allan Hubbard Saga: Supporters head to the exit door
Allan Hubbard Saga: Threats & the Mysterious PWC Report
Allan Hubbard Supporters: Conflict of Interest
VW Veneer reveals BMW heart
VIDEO: Jenni McManus Explains Allan Hubbard Collapse
Allan Hubbard Statement on SCF Receivership
VIDEO: Sandy Maier - full news conference on SCF Receivership
Market Alert: South Canterbury Finance to be placed in Receivership
Allan Hubbard: Ignorant Supporters Blissfully Unaware
Thornton Report 2: Allan Hubbard Guilty as Charged
Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report: Allan Hubbard's Aorangi Securities
Whatever happened to? Muriel Dunn
Bothered by Simon Botherway
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same
Jane Diplock Q & A Interview
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


Recommended Fishpond Reading


Crisis: One Central Bank Governor and the Global Financial Collapse

Buy The Intelligent Investor & more @ Fishpond.co.nz

Fishpond


c Share Investor 2010

Wednesday, September 22, 2010

Pumpkin Patch Ltd: 2010 Full Year Profit Analysis.

To those at Lynfield College currently reading this today, you might want to check out the updated links below this post for more on PPL. You can also download PPL company reports for free from here.

The Pumpkin Patch Ltd [PPL.NZX] Full Year 2010 Net profit after tax up 76% to $25.5 million. It compares to the 2009 Full Year Profit of $14.7 million.

The selling of 20 loss-making stores in the USA along with an improvement in operations there, in the United Kingdom and a relatively flat result in Australasia have contributed to the result.

Repayment of a large amount of debt has also been a key factor in bottomline profit.

The worrying factor is that revenues are down by 11% but some of that can be put down to the closure of the North American stores.

A disappointment to me is that head office costs have remained similar to last year - an effort could have been made to reduce costs during this recession. Likewise the higher dividend, this should have been retained for future growth.

Key Points

- Net profit after tax up 76% to $25.5m
- Net profit after tax (from continuing activities) up 38%
- Total revenue of $382.0m was down 11%
- Total dividend for the year up 27% to 9.50 cents per share
- Improved EBIT margins across all retail markets
- Launch of the new brand Charlie & Me
- Entry into 4 new Wholesale markets


Forecasts by management for 2011 have been understandably sketchy - few NZX listed companies are sure what 2011 will bring - but the indications from management assure shareholders that they are "well placed" if trading conditions improve.

I would imagine the struggle will continue in North America and the United Kingdom and there will be further negative impacts for the Australasian part of the business during 2011, depending on the impact of interest rates on the discretionary spending of Pumpkin Patch's target customer - the young middle-class family.


Disclosure
I own PPL shares in the Share Investor Portfolio.

Pumpkin Patch @ Share Investor

Share Price Alert: Pumpkin Patch Ltd 4
Share Price Alert: Pumpkin Patch Ltd 3
Share Price Alert: Pumpkin Patch Ltd 2
Share Price Alert: Pumpkin Patch Ltd
Stock of the Week: Pumpkin Patch Ltd
VIDEO INTERVIEW: Pumpkin Patch CFO Matthew Washington
Pumpkin Patch Ltd: 2010 Full Year Profit Analysis
Pumpkin Patch Ltd move downmarket
Long Term View: Pumpkin Patch Ltd
Pumpkin Patch's North American Downsizing a Prudent move
Digging at Pumpkin's Profit
Long vs Short: Pumpkin Patch Ltd
Pumpkin Patch Buyback shows Confidence in the Future
Pumpkin Patch takes a hit
Pumpkin Patch ripe for the picking
What is Jan Cameron up to?

I'm buying
Why did you buy that Stock? [Pumpkin Patch]
Rod Duke's Pumpkin Patch gets bigger
Buyer of large piece of Pumpkin Patch a mystery
Pumpkin Patch a screaming buy
Broker downgrades of PPL lack long term vision
Pumpkin's expansion comes at a cost
Pumpkin Patch vs Burger Fuel
Pumpkin Patch profits flatten
New Zealand Retailers ring up costs not tills

Discuss PPL @ Share Investor Forum
Download PPL Company Reports

Buy Pumpkin Patch Clothing


Buy What Was I Thinking: A Memoir @ Fishpond.co.nz

What Was I Thinking: A Memoir, by Paul Henry