Kathmandu lifts first-half profit

Retailer expects Aust retail sector to be more challenging than NZ in FY.

Kathmandu (KMD) has posted a strong lift in first-half profit but warned the Australian retail sector will remain more challenging than its New Zealand counterpart in the full year.

In the six months to January 31, Kathmamdu posted a net profit of $NZ11.36 million, a 9.9% increase on the previous corresponding period.

Revenue was $NZ167.64 million, a modest 1% lift on the previous corresponding period's $165.92m.

The group will pay a fully-franked interim dividend of 3 cents on June 17, to shareholders on the register at June 6.

Chief executive officer Peter Halkett said the first-half results were buoyed by continuing strong same store sales growth, particularly in Australia, combined with improved gross margins and effective management of costs.

In Australia, Kathmandu’s growing market penetration delivered 6.6% same store sales growth, following a 9.6% increase for the same period last year.

Mr Halkett said the the New Zealand economic environment and consumer sentiment remained generally positive, but warned there is more uncertainty in Australia’s prospects.

"I anticipate it [Australia] will continue to be the more challenging retail market during 2014," he said.

"Nevertheless our increasing brand awareness and profile in Australia makes me confident that we will see on-going sales growth this year."

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