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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.
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