Noni B dives

Noni B after tax profit has almost halved in fiscal 2013, falling from $2.7 million to $1.5 million.

Joint managing director David Kindl said he was disappointed with the result, citing low margins as a key issue.

Gross margin was 59.4 per cent of sales compared with 59.6 per cent in the previous year.

Margins were affected by substantial discounting in the women’s apparel sector and a write-off in respect of aged inventory.

The company has written off the remaining goodwill created when it was listed on the ASX in 2000, resulting in a non-cash impairment charge of $5.0 million and a statutory after tax loss of $3.5 million.

At June 30 Noni B’s cash balance was $9.9 million, compared with $9.3 million at 1 July 2012, and the company had no bank borrowings.

Same store sales decreased by 0.7 per cent, however, when adjusted for the extra week in the previous year they increased by 1.2 per cent.

Sales increased 1.5 per cent to $121.5 million when including the four new stores opened in the 12 months to July 2013.

Noni B operates 219 sites.

Kindl said spending in the womenswear market continues to be an issue.

“This is a disappointing result. Revenue increased despite one less week’s trading, however; earnings were affected by lower margins and higher expenses in a year when spending on women’s fashion was impacted by low consumer confidence."

Inventory was reduced towards the end of the year in view of weak market conditions and totalled $13.5 million at 30 June 2013, 11.4 per cent below 30 June 2012.

Total expenses increased by 3.8 per cent.

Sales expenses, including wage costs and marketing costs, increased by 4.7 per cent to $33.9 million, due mainly to higher wage costs, staff training and the introduction of Sunday trading in Western Australia.

Occupancy expenses, including rents and depreciation of store fitouts, increased by 4.4 per cent to $31 million due to increases in the number of stores and in store rents, partially offset by reductions negotiated on lease renewals.
 
Administrative expenses fell by 1.7 per cent to $8.3 million.