Mitre 10 pays biggest dividend in 17 years

  • 04/11/2016

Mitre 10 has paid shareholders their biggest dividend in at least 17 years as profit soared.

The Auckland-based company paid dividends of $5.8 million in the year ended June 30, up from $1.8m a year earlier, giving the biggest return since at least 1999, according to financial statements lodged with the Companies Office.

The company says increase profit is thanks to a lower wage bill and growing consumer demand.

Mitre 10 posted a profit of $3.2m, up from just $106,000 in 2015 when it spent more on land and rent for future stores, with wholesale revenue rising 8.7 percent to $766.9m.

Mitre 10's income from selling services to members rose 53 percent to $15m and rental income almost doubled to $1.8m.

In a separate statement, Mitre 10 said network sales from its stores rose 9.4 percent to $1.24b, implying margins for the 81 owner-operator stores maintained their gross margins at about 38 percent.

"Our financials show Mitre 10 is doing extremely well in a competitive retail and trade environment," chief executive Neil Cowie said.

"We're extremely pleased with the overall growth and direction of the cooperative and have been in the process of implementing transformational changes in our business to ensure this success will continue."

New Zealand's booming property market has been a boon for hardware chains such as Mitre 10, Bunnings, Carters and the Fletcher Building-owned Placemakers, driving demand for building, hardware and garden supplies.

Government figures show retail spending on those products rose 10 percent to $6.74 billion in the year ended June 30, or 8.6 percent when adjusted for inflation.

Stores owned by Mitre 10's board accounted for about $208.8 million, or 27.2 percent, of the company's sales, up from $181 million, or 25.5 percent, a year earlier.