By Wares June 21, 2017 Industry news

Having warned of tougher second half trading earlier this month, "cautious confidence" is the outlook behind Smiths City's full year financial results to 30 April 2017 released today.

For the year, Smiths City's top line increased to $227.4 million for the year (+2.5%) with retail same store sales +3% to $198.2 million.

The year-end NPAT however fell to $2.4 million from $5.6 million the previous year (negative 133%).

This figure looks worse in some respects thanks to last year's result including one-off revenue ($1.8 million) from the sale of the Colombo Street premises and higher tax credits.

Still, says the company, growth "fell away" in the last quarter, particularly in the upper North island markets.

This hit particularly the Furniture City business acquired in April last year which has "struggled in the face of the recent trading downturn".

Additionally, although there is a refreshed offer in the works, the finance business has "lost ground" to aggressive competitors, says Smiths City, although its earnings have remained strong (Trading Profit was +23.3% at $3.7 million).

On the plus side, more costs have been taken out of the retail business in terms of reduced Working Capital and lower inventory and there are further opportunities to rationalise its property portfolio and improve logistics.

In terms of the firm's ongoing transformation, which is two years into its five-year programme, in coming months Furniture City and five other stores will get the new "Live Better" format and branding seen in the new Hastings store which opened in March (see photo above).

Encouraged, by initial results from the new Hastings model, Chairman Craig Boyce says he is "cautiously optimistic that these changes will begin, in the second half of the year, to rebuild the retail momentum we have achieved in the business."

Indeed, in terms of the new approach, CEO Roy Campbell says the Hastings store has "carved out a very strong position in the region, despite facing robust competition".

Smiths City released its previous update on 6 June.

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