annual report 2005 - Pumpkin Patch investor relations

More documents

Recommendations

Info

id culture United Kingdom retail 2005 $000 2004 $000 Turnover GBP 9,994 6,999 42.8% Turnover NZD 26,408 19,537 35.2% EBIT (283) (1,333) 78.8% (1.1%) (6.8%) Stores 16 9 The 42.8% growth in GBP sales came from new stores opened in the year and the continued growth in turnover at the more established stores created by the increase in customer awareness of the Pumpkin Patch brand. Considering the soft nature of the United Kingdom retail environment we are very happy with this sales result. During the year 7 new stores were opened, taking the total number of stores to 16. The full trading impact of these new stores will not be seen until the 2006 and 2007 years. The trading loss for the year of $0.3m, was an improvement on the $1.3m loss in 2004. The opening of the 7 new stores this year has significantly reduced the impact of improved trading at the more established stores. The stores that have been open for more than 24 months are generating acceptable earnings as a percentage of sales. As we increase store numbers off a relatively low number of existing stores, the impact of the improved trading results from more established stores will continue to be understated. Overall the result, especially that from the more established stores, reinforces our confidence in this market and the future of the Pumpkin Patch brand in it. We plan to open 6 new stores in the 2006 financial year. wholesale and direct 2005 $000 2004 $000 Turnover NZD 38,225 16,002 138.9% EBIT 9,626 2,127 352.6% 25.2% 13.3% The relationships developed with wholesale customers over the last three to four years resulted in increased wholesale orders in 2005. Turnover increased across all major wholesale markets, especially the Middle East, the United States and Ireland. 8 The very nature of the wholesale business, especially the time it takes to convert a new relationship into confirmed wholesale orders, will give us some fluctuations in sales growth each year.
Direct (mail order and internet) turnover also increased this year as effort was concentrated on better utilising our large Australasian customer database to generate sales. We are currently expanding our Wholesale and Direct business in the UK, however, these are not expected to generate earnings in the 2006 financial year. As a percentage of sales, earnings increased 11.9% to 25.2%, reflecting the highly fixed nature of overheads associated with the Wholesale and Direct operations. United States retail Late in July 2005 our first United States retail store opened in Los Angeles. It is too early to make any comment regarding levels of trading, although feedback from customers to date has been as expected, very favourable. Prior to confirming the entry into this new retail market we undertook a series of detailed investigations into the viability of the market and developed an appropriate strategy of entry to it. The investigation and development process had a one-off after tax cost in the 2005 year of approximately $0.8m. Leases on 3 additional stores have been confirmed; 2 in Los Angeles and 1 in the San Francisco Bay Area. We expect the 3 stores will be open in the 2006 financial year. This exploratory market entry strategy is similar to that employed five years ago when Pumpkin Patch entered the United Kingdom retail market. We are confident that this staged approach will result in long term benefits for shareholders. outlook We continue to look for strong growth in all of our markets. Consumer awareness of the Pumpkin Patch brand continues to develop in new markets. Australia in particular still offers our greatest near term opportunity. I am confident that the Company’s long term strategy will continue to add value for all shareholders. Finally, I would again like to acknowledge the entire team. Their dedication and enthusiasm for Pumpkin Patch continues to be our inspiration, giving us continued ability to grow the brand in our existing and new markets around the world. Maurice Prendergast 9
Page 1 and 2: annual report 2005
Page 4 and 5: contents performance highlights 1 f
Page 6 and 7: financial highlights Year ended 31
Page 8 and 9: id culture
Page 10 and 11: id culture managing director’s re
Page 14 and 15: ur team spirit! directors Greg Muir
Page 16 and 17: ur team spirit! senior management t
Page 19 and 20: corporate governance The Board of D
Page 21: external auditor independence To en
Page 24 and 25: directors shareholdings 31 July 200
Page 27 and 28: Pumpkin Patch Limited & Subsidiarie
Page 56 and 57: shareholder information for the yea
Page 59 and 60: corporate directory registered offi

annual report 2005 - Pumpkin Patch investor relations

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?