annual report 2005 - Pumpkin Patch investor relations

chairman’s letter
Dear Shareholders
On behalf of the Board I am pleased to report that Pumpkin Patch Limited has again generated a very strong result for
its shareholders. Net profit after tax (before one-off costs of developing the United States retail operation) was $25.4m.
Earnings before interest and tax (before one-off costs of developing the United States retail operation) of $37.5m was
64% ahead of the 2004 year (before costs of restructuring pre-listing employee share schemes).
The improved performance was due to solid sales growth in all markets – particularly our home markets of
New Zealand and Australia, allied with ongoing focus on margin management. It also reflects our developing
international wholesale business. We now have operations in 10 countries with active business development teams
located in New Zealand and Europe targeting a number of new markets for 2006 and 2007.
We have had a very active store opening programme in 2005 – with 23 stores opened across 4 countries. Of
particular note is our first store in the United States. Located at the Glendale Galleria in Los Angeles, California this
store is the culmination of 12 months work testing the viability of stand alone stores (given we already have a significant
wholesale business in the US). We extend a very warm welcome to all our new US based team and look forward to
their contribution over coming years.
Your company continues to maintain excellent financial health – recording positive net cash flow of $4.6m after the
significant store roll-out programme and the growth in the wholesale sector – allied to a very strong balance sheet
with nil debt, giving us plenty of scope to pursue our international growth agenda.
We look forward to paying a fully imputed dividend of 4.25cps on 18 October 2005 bringing the total amount paid
for 2005 to 8.00cps which is in line with our stated policy of distributing approximately 50% of net profit after tax.
The Directors look forward to welcoming shareholders to our second AGM to be held at the Ellerslie Convention Centre
on Tuesday 22 November 2005 at 1pm. At the meeting Chrissy Conyngham and Sally Synnott will resign by rotation
and being eligible will offer themselves for re-election. We will also be seeking shareholder approval for the 2005
executive director share option plan (details of which are included in the enclosed Notice of Meeting).
And finally a huge thank you to Maurice and all the fabulous team at “the Patch”.
This is a truly outstanding result – one that reflects the developing
maturity of the business as an Australasian company growing a great
brand in markets across the world.
Greg Muir
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