Pacific Retail Group has released a trading update which dashes any hopes that its freshly purchased British subsidiary Powerhouse was going to be a quick fix-it job.
Pacific Retail, majority owned by expat millionaire Eric Watson, produced a mixed bag of news in its rundown on the Christmas and New Year trading.
New Zealand is good; Britain not so hot.
The company – which would not give sales numbers – said its New Zealand retail arm experienced “excellent trading” over December and January.
Same store sales were up 8.2 per cent and margins satisfactory as a result of “well-planned and executed promotional campaigns”, the company said.
Pacific Retail Finance, Noel Leeming Financial Services and Bendon were all performing strongly.
But Powerhouse, the British retailer that was in receivership when Pacific Retail bought it last year, did not meet its targets.
“It is now clear it will take longer than originally expected to restructure the business and achieve profitability.”
It was not expected to make a profit this year.
But Powerhouse yesterday warned the loss would be greater than predicted and the parent company also expected a full-year loss.
Pacific Retail chairman Maurice Kidd said the update showed the trends were as expected but that they would take longer.
Chief executive Peter Halkett had previously said Powerhouse should be in profit by 2005 and Kidd said “that is still the plan”.
Pacific Retail had also previously said its medium-term goal was for Powerhouse to reach earnings before interest and tax of 3 per cent to 5 per cent on turnover of £300 million-£400 million.
From The New Zealand Herald