Myer and Oroton post impressive profits

Department chain Myer and luxury brand Oroton have each posted strong first-half results, with Myer claiming its turnaround program is responsible for delivering profit rises despite lower sales.

The department store chain, which is owned by equity firm TPG, recorded a first half net profit of $83 million, which is a 5.3% rise from the previous corresponding period.

Chief executive Bernie Brookes says the company’s turnaround program has managed to deliver strong results despite a 3.7% drop in sales to $1.7 billion.

First half earnings before interest and tax have risen 6.3% to $161.3 million from $151.76 million.

“The work undertaken in the first 34 months of the 50-month turnaround phase has given us a more flexible platform to manage the business in a difficult economic environment, and we are pleased with our sales performance against this backdrop,” he said.

“Our strong cost control, variabilised cost base, quicker responses and the cemented changes in buying and ranging, combined with improved store execution and targeted advertising, have enabled us (to) deliver increased profits, despite a fall in sales.”

TPG, which purchased Myer from Coles Group about three years ago, is over halfway through a turnaround program, which includes renovations of its Melbourne store.

“The 2009 half year has delivered continued improvement in the profitability of the company,” the company said.

Meanwhile, accessory retailer Oroton has also recorded a 20% rise in first half net profit to $12.5 million, claiming its minimal debt and strong cashflow place it in a healthy position.

Revenue has also grown 11.4% to $74.36 million, while like-for-like sales have risen 12% across the group.

Chief executive Sally Macdonald has said the company has managed to record strong results despite the downturn.

“Our like-for-like results demonstrate the strength of our assets as well as our ability to navigate through volatile trading conditions,” she said.

“Coupled with the structural changes that we have implemented over the past 24 months, and our focused strategy of being leaders within our competitive segments, we have a healthy foundation for the future.

“The increased interim dividend reflects the strength of the company’s position today with minimal bank debt, strong cashflow generation and a healthy balance sheet.”

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