Country Road reports 50% jump in sales
Country Road has continued to evade the gloom weighing on Australia’s rag trade, reporting that total group sales for the half year to December jumped more than 50.5 per cent $331.3 million.
It is also expecting to report next month that earnings have doubled to as much as $29 million for the period which includes the contribution of its recent acquisition, Witchery Group, as of September 30 last year.
The Witchery acquisition aside, Country Road’s chief executive Iain Nairn said the strong underlying performance reported from the company’s original business for the first 20 weeks of the year, continued through to Christmas.
Comparable store sales in Australasia increased 10.7 per cent for the half year - down slightly from the 12.2 per cent reported for the 20 weeks to November 10.
‘‘The trade has just continued to perform well,’’ said Mr Nairn. ‘‘So it’s been a pretty healthy performance across the group’’.
The company said it expects group profit before tax for the December half will be in the range of $26 million to $29 million compared to $13.7 million for the corresponding period last year.
This includes earnings contributions from Witchery from September 30 as well as one-off acquisitions costs associated with the $172 million acquisition.
Prior to the acquisition, Country Road said the combined financials of the two companies, based on their respective 2011 financial year results, would have shown normalised revenues of $679 million, and normalised earnings before interest, tax, depreciation and amortisation (EBITDA) totalling $73 million.
Cost synergies of $10 million are expected to be extracted to be realised over four years.
Mr Nairn said the company is not offering guidance for its full year results at this stage.
While Country Road is listed on the ASX, almost all of its shares are owned by two investors.
Retail billionaire, Solomon Lew's Australian Retail Investments (ARI), owns almost 12 per cent of the company, and South African group, Woolworths, owns just under 88 per cent.