FY25 Interim Results
21 March 2025
26 weeks ending 26 January 2025
Helping Kiwis live better every day
Contents
- Chair's update - Dame Joan Withers
- Group update - John Journee
- Group financial performance - Mark Stirton
- Turnaround update - John Journee
- Looking ahead - John Journee
- Appendix - Additional information
- Glossary
2
Chair's update
Dame Joan Withers
Chair
3
Chair update - Half Year in review
Our turnaround is starting to gain momentum and building the foundations for long-term growth.
- Sales have held up relatively well in a challenging retail environment with subdued customer spending.
- Against this backdrop, we are making real progress - an improving sales trend, cutting costs and capital expenditure, and focusing on the fundamentals.
-
We have made excellent progress in reducing cost and capital expenditure.
But there's more to do. - Our priorities are refreshing our core categories, improving efficiency and positioning the business for the future.
- Our disciplined approach, positive cash position and liquidity give us confidence that we will emerge stronger.
- The Board made the difficult but prudent decision not to pay an interim dividend given the half year results and the current best estimate of the full year.
- Notwithstanding the challenging market conditions, we are committed to growing shareholder value over the long term and return to paying dividends when commercially prudent.
Sales $1.6bn
Down 1.6% on FY24 H1
Gross Profit $521.7m
Gross Profit Margin 32.5%
Down 180bps on FY24 H1
Positive Net
Cash Balance $19.0m
From net debt of $50.7m at FY24 year end
4
Group update
John Journee
Interim CEO
5
Group update - Half Year in review
Group Results
- Sales were down 1.6% in the half year - a significant improvement in the decline in sales we saw last year.
- First quarter saw a decline in sales of 2.5% compared to FY24 Q1 with the second quarter improving with a decline in sales of 0.9%.
- Encouragingly, following a soft November and December, we have seen sales growth in January compared to prior year. This has continued into the first month of H2.
- Gross Profit was down 6.8% with margin decreasing 180bps to 32.5% as competitive retail environment and soft consumer demand required resetting of our prices and increased promotional activity.
- We are pleased to report FY25 H1 has seen a reduction of 2.8% in CODB year on year and down from 31.7% to 31.3% as a percentage of sales.
- Despite strict cost control, this has not been enough to offset the decline in gross margins, resulting in Operating Profit1 ("EBIT", pre-IFRS16) of $19.5m in the half, compared to $43.0m in FY24 H1.
- While sales decreased 1.6%, Group market share2 vs NZ Core Retail held relatively steady year on year at 15.5% as NZ Core Retail spending also declined.
Continuing Group Sales ($m) and Margin (%)
34.3% | 32.5% | 35% | ||||
2,000 | 1,607.2 | |||||
1,632.7 | 30% | |||||
1,500 | 25% | |||||
20% | ||||||
1,000 | 15% | |||||
10% | ||||||
500 | ||||||
5% | ||||||
0 | 0% | |||||
FY24 H1 | FY25 H1 | |||||
Continuing Group EBIT ($m)
43.0
19.5
FY24 H1 | FY25 H1 |
1. | Operating Profit ("EBIT") excludes the impact of NZ IFRS 16 and unusual items and is a non-GAAP measure. For a reconciliation between Operating Profit and Reported EBIT refer to Slide 32 | |
of this presentation and Note 3 of the interim financial statements for the 26 weeks ending 26 January 2025. | 6 | |
2. | Group market share is for six months ending January 2025 compared to six months ending January 2024. NZ Core Retail spend includes retail spend excluding grocery, liquor, travel, fuel, |
and entertainment spend. TWG Group excluding three main grocery lines (fresh produce, chilled and frozen, and pantry). Source: www.dotlovesdata.com (ANZ).
The Warehouse
FY25 H1 | FY24 H1 | Variance | |
Sales | 944.7 | 965.6 | -2.2% |
Operating Profit (EBIT pre-IRS16) | 12.5 | 38.8 | -67.8% |
Operating Margin % | 1.3% | 4.0% | (270)bps |
Online sales | 44.3 | 53.5 | -17.3% |
Online as % of sales | 4.7% | 5.5% | (80)bps |
Number of stores | 85 | 88 | (3) |
Rolling 12-month Sales density2 | $3,785 | $3,857 | -1.9% |
The Warehouse Sales ($m)
967.3 | 1,013.7 | 965.6 | 944.7 | |
895.4 | ||||
FY21 H1 | FY22 H1 | FY23 H1 | FY24 H1 | FY25 H1 |
- Same store sales1 down marginally 0.5%.
- Flat store traffic and increased traffic sales conversion.
- Homeware and apparel reset in progress. Sales and margins declined in FY25 H1 as we reposition offer and clear older merchandise.
- Toys, FMCG, Beauty, Furniture and Audio all saw pleasing growth in sales.
- Gross profit % declined 210bps in an increasingly competitive environment with lower margin categories mix a meaningful influence.
- CODB decreased 0.4% on prior period.
- Store closures - Milford, Tauranga, Pakuranga.
Same store | Store foot | Store traffic sales | Basket Value |
sales1 | traffic | conversion | (2.6%) |
(0.5%) | Flat | + 2.1% |
1. | Same store sales excludes online and removes the impact of opening and closing stores year on year. | 7 |
2. | Sales density calculated as total sales (including online) for the 12 months ending January divided by average store square metre for the 12 months ending January. |
Warehouse Stationery
FY25 H1 | FY24 H1 | Variance | |
Sales | 109.8 | 117.9 | -6.8% |
Operating Profit (EBIT pre-IRS16) | 2.4 | 7.7 | -69.5% |
Operating Margin % | 2.2% | 6.6% | (440)bps |
Online sales | 7.4 | 9.5 | -21.7% |
Online as % of sales | 6.8% | 8.0% | (120)bps |
Number of stores | 66 | 66 | - |
Rolling 12-month Sales density2 | $4,342 | $4,605 | -5.7% |
Warehouse Stationery Sales ($m)
- While foot traffic and basket value decreased YoY, more purposeful shopping journeys resulted in a 6.4% increase in traffic sales conversion across our stationery stores.
- Key customer set of 30k Biz Rewards customers continue to struggle.
- Print and Create centres outperformed with growth of 7.3% on prior period at strong margin profile.
- Gross profit % declined 270bps, due to increased promotional and clearance activity, particularly in art, fashion stationery and print & consumables.
136.6 | • CODB well controlled, decreasing 3.0% on prior period. | ||||||
122.0 | 124.1 | ||||||
117.9 | 109.8 | ||||||
Same store | Store foot | Store traffic sales | Basket Value1 | ||||
sales1 | traffic1 | conversion1 | (10.0%) | ||||
FY21 H1 | FY22 H1 | FY23 H1 | FY24 H1 | (6.3%) | (2.2%) | + 6.4% | |
FY25 H1 |
1. | Same store sales excludes online and removes the impact of opening and closing stores year on year. Information is for Stand-Alone Warehouse Stationery Stores only and excludes | 8 |
2. | SWAS stores. | |
Sales density calculated as total sales (including online) for the 12 months ending January divided by average store square metre for the 12 months ending January. |
Noel Leeming
FY25 H1 | FY24 H1 | Variance | |
Sales | 548.9 | 544.4 | +0.8% |
Operating Profit (EBIT pre-IRS16) | 8.5 | 14.3 | -40.4% |
Operating Margin % | 1.6% | 2.6% | (100)bps |
Online sales | 58.5 | 61.4 | -4.7% |
Online as % of sales | 10.7% | 11.3% | (60)bps |
Number of stores | 66 | 67 | (1) |
Rolling 12-month Sales density2 | $12,533 | $12,870 | -2.6% |
Noel Leeming Sales ($m)
593.2 | 582.7 | 556.7 | 544.4 | 548.9 |
FY21 H1 | FY22 H1 | FY23 H1 | FY24 H1 | FY25 H1 |
- Noel Leeming positive sales growth demonstrated its brand strength and resulted in market share gains.
- Customers shopping missions were more purposeful due to discretionary nature of merchandise. Foot traffic conversion up 7.1%.
- Standout categories included small appliances, audio, smart home tech, and gaming products.
- Gross profit margin held up well in a highly competitive market, decreasing marginally 70bps, with higher sales in lower margin categories.
- CODB increased 2.6% in the half due to reallocation of costs from Group to brands.
Same store | Store foot | Store traffic sales | Basket Value |
sales1 | traffic | conversion | (6.7%) |
(1.8%) | (1.7%) | + 7.1% |
1. Same store sales excludes online and removes the impact of opening and closing stores year on year. Noel Leeming same store sales excludes NL Commercial.
2. Sales density calculated as total sales (including online) for the 12 months ending January divided by average store square metre for the 12 months ending January. | 9 |
Our ESG progress
40% of private label sales from products with sustainable attributes (FY24: 40%).
60% of private label sales from products with sustainable packaging (FY24: 55%).
Scope 1 and 2 market-based emissions decreased 33% relative to FY24 H1 1.
83% stores and sites powered by solar (168 site locations covered by Lodestone Energy supply arrangements).
Diverted 80% operational waste from landfill (FY24: 78%).
122 tonnes of post-consumer waste diverted from landfill (FY24 H1: 137 tonnes).
1. This result should be considered preliminary and has not been subject to
external assurance.
10