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Pumpkin Patch affirms earnings guidance

NZN 23/06/2016 Sophie Boot

Pumpkin Patch director Josette Prince is the latest resignation from the ailing retailer's boardroom, with the company using her abrupt departure to affirm earnings guidance.

Josette resigned her directorship, effective immediately, "due to other business and travel commitments", ending two years on the board, the Auckland-based retailer said in a statement.

She was appointed a director in July 2014, replacing founder Sally Synnott when the company was undergoing a strategic review to revive falling sales and profit.

Since then, both the boardroom and executive have gone through a reshuffle as Pumpkin Patch try to turn its fortunes around.

Separately, the company affirmed guidance for normalised earnings before interest, tax, depreciation and amortisation to be between $2.8 and $3.4 million in the year ending July 31, a range it gave with its first-half results announcement in May. Pumpkin Patch reported normalised ebitda of $11.7m in the 2015 financial year and $17m in 2014.

In his address to shareholders last November, managing director Luke Bunt said 2016 earnings would be "significantly below" 2015's.

Bunt told investors the stores needed more investment, the clothes needed to become more 'fashion forward' and the website needed to move away from being simply a clearance vehicle. He also warned that legacy costs of historical property exposures were putting the retailer at a disadvantage.

Pumpkin Patch's sales fell 16 per cent to $102.8m in the first half from a year earlier, with online sales down 13 per cent. It made a $6.8m loss in the first half, compared to a $700,000 profit a year earlier.

The shares last traded at 6.5 cents, and have dropped 46 per cent this year, making it the fourth-worst performer on the NZX All Index. Pumpkin Patch was a member of the NZX 50 Index until October 2013, when it was replaced by petrol station chain Z Energy.

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