FINANCIAL REVIEW - DISCUSSION AND ANALYSIS

Surplus After Tax

The Groups surplus after tax was $16,510,000 a 9.6% increase on last years surplus.Total sales went up from $259.777m to $271.573m,a 4.5% increase. The Australian retail segment again performed strongly with an increase in operating profit of NZ$1.262m over the previous year.

The operating loss in Canada reduced from NZ$980,000 to NZ$856,000 in its second full year of operation.The directors are satisfied with this result and more stores are planned in Canada for 05/06.

Occupancy costs for the group represented 7.0% of sales this year compared to 6.7% last year.

Depreciation for the group was $5.903m down from $6.025m last year.

CASH FLOW

Net cash flow from operating activities was $10.089mm compared to $24.779m last year. Key drivers were:

" an increase in payments to suppliers of $19.073m an 8.3% increase on last year due mainly to the stocking of 14 new stores during the year.

" an increase in income tax paid of $2.977m an increase of 62%.

Net cash outflow relating to investing activities was up by $2.588m to $8.712m. Key driver was:

" purchase of new assets increased to $9.153m up from $6.409m also due to the investment in 14 new store fitouts.

Net cash outflow from financing activities was $8.107m compared to $6.487m last year due mainly to:

" Dividends paid increased to $8.496m from $6.944m 03/04.

BALANCE SHEET
Net assets increased from $57.607m at the end of 03/04 to $65.389m this year. Long term borrowings decreased slightly to $40.163m from $40.604m last year. The net debt to debt plus equity ratio decreased to 33.5% from 31.6% last year. The equity ratio at year end was 50.1% compared to 46.9% at the same time last year. Total assets went up from $122.831m to $130.421m due principally to inventories increasing by $9.5m The working capital ratio increased from 4.3:1.0 to 4.5:1.0

EVENTS AFTER BALANCE DATE
There were no events after balance date requiring disclosure.

SHAREHOLDERS RETURNS

" Declared dividends total 23 cents per share compared to 21 cents for 03/04.

" Shares traded between $5.89 and $8.40 ending at $7.60 at 30 June 2005.

" Average return on equity was 26.8% compared to 28% last year.

" Average return on total assets was 13.0% compared to 13.0% last year.


Trend Statement

FINANCIAL PERFORMANCE
2005
2004
2003
2002
2001
2000
1999
 
$000
$000
$000
$000
$000
$000
$000
Group Sales
271,573
259,777
224,802
214,105
189,168
181,983
156,940
Profit before depreciation,amortisation & interest (EBITDA)
31,896
29,892
24,022
25,623
21,590
21,348
18,059
Depreciation and amortisation
5,978
6,100
5,165
4,965
4,406
4,397
3,072
Profit before interest and Tax
25,918
23,792
18,857
20,658
17,184
16,951
14,987
Net interest
1,567
1,729
2,220
1,960
2,054
1,434
1,438
Profit before taxation
24,351
22,063
16,637
18,698
15,130
15,517
13,549
Income tax expense
7,841
7,003
5,067
5,992
5,091
5,578
4,775
Operating profit after tax attributable to members
16,510
15,060
11,570
12,706
10,039
9,939
8,774
Net operating cash flow
10,089
24,779
6,789
8,871
7,887
14,214
2,781
Ordinary dividends per share paid out
8,496
6,944
14,266*
5,978
2,518
5,216
4,444
* includes a special dividend of 7,710.
        
FINANCIAL POSITION
2005
2004
2003
2002
2001
2000
1999
 
$000
$000
$000
$000
$000
$000
$000
Cash
7,234
14,017
2,294
685
637
0
0
Other Current Assets
96,215
84,973
83,161
77,825
67,537
62,134
59,082
Other non-current assets
23,632
21,394
21,877
16,449
22,235
19,635
14,583
Future income benefits
3,193
2,225
1,598
1,061
417
0
0
Total tangible assets
130,274
122,609
108,930
96,020
90,826
81,769
73,665
Intangible assets
147
222
298
393
505
625
756
Total Assets
130,421
122,831
109,228
96,413
91,331
82,394
74,421
Current interest bearing debt
0
0
172
174
225
192
185
Other liabilities
23,194
23,133
15,530
13,917
13,031
17,747
15,336
Total current liabilities
23,194
23,133
15,702
14,091
13,256
17,939
15,521
Term borrowings
40,163
40,604
42,299
27,965
27,525
21,859
21,049
Deferred taxation
0
0
0
0
0
9
800
Other long term liabilities
1,675
1,487
1,179
1,029
978
0
0
Total liabilities
65,032
65,224
59,180
43,085
41,759
39,807
37,370
        
Net assets
65,389
57,607
50,048
53,328
49,572
42,587
37,051
        
Reserves and retained profits
57,495
50,124
43,036
46,031
41,860
34,875
29,339
Paid up capital
8,261
8,078
7,712
7,712
7,712
7,712
7,712
Treasury Stock
(367)
(595)
(700)
(415)
0
-
-
        
Total shareholder equity
65,389
57,607
50,048
53,328
49,572
42,587
37,051
        
Per ordinary share
 
Basic earnings per share before abnormals
42.8¢
39.1¢
26.6¢
32.0¢
26.03¢
25.8¢
22.8¢
Basic earnings per share after abnormals
-
-
30.0¢
33.0¢
-
-
-
Diluted earnings per share
41.9¢
38.2¢
29.3¢
32.2¢
-
-
-

Dividends declared per share
- Interim

6.5¢
6.0¢
5.5¢
- Final
14¢
13¢
30¢†
10¢
8.5¢
7.5¢
6.0¢
        
Net Tangible asset backing
$ 1.69
$1.49
$1.29
$1.37
$1.27
$1.09
$0.95
        
ANALYTICAL INFORMATION
2005
2004
2003
2002
2001
2000
1999
EBITDA to sales
11.7%
11.5%
10.7%
12.0%
11.4%
11.7%
11.5%
EBIT to sales
9.5%
9.2%
8.4%
9.6%
9.1%
9.3%
9.5%
Profit after tax to sales
6%
6%
5%
6%
5%
5%
6%
EBIT to total Assets
19.9%
19.4%
17.3%
21.4%
18.8%
20.6%
20.1%
Return on Average Shareholders funds
26.8%
28.0%
22.0%
23.9%
21.8%
24.9%
25.3%
Current assets to current liabilities
4.5
4.3
5.4
5.6
5.1
3.5
3.8
EBIT interest cover
16.5
13.8
8.5
10.5
8.4
11.8
10.4
Effective tax rate
32.2
31.7%
30.5%
32.0%
33.6%
35.9%
35.2%
        
Gearing
 
Net borrowings to equity
50.4%
46.2%
80.3%
51.5%
54.7%
51.8%
57.3%
        
Other
 
Shares issued at year end
38,617,164
 38,537,512
 38,419,162
 38,471,352
 38,558,600
 38,558,600
 38,558,600
Treasury stock at year end
91,436
121,088
139,438
87,248
0
0
0
Jewellery stores at year end
156
143
134
120
115
106
102
Exchange rate for translating Australian results
0.92
0.88
0.89
0.82
0.79
0.8
0.84
Exchange rate for translating Canadian results
0.87
0.84
0.8
-
-
-
-
†Includes 20¢ special dividend.

 

 

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