Wellington, Sept 17 NZPA - Children's clothing company Pumpkin Patch has posted a 27.5 percent decline in full year net profit to $17.1 million.

The company said today that its result was significantly affected by higher interest charges, higher quota costs and a difficult United States retail environment.

Australia and this country continued to deliver strong sales performances even when faced with more challenging retail conditions across both markets.

The result for the year to the end of July compared with net profit of $23.5m the previous year, and was made on total operating revenue up 12.3 percent to $410.4m.

Operating surplus after tax was down 27.2 percent to $20.1m.

A final dividend of 3.5 cents per share is to be paid, compared to 4.5cps last year.

Difficult retail conditions were expected during 2009, which was likely to be more difficult than the latest year, chief executive Maurice Prendergast and executive chairman Greg Muir said.

The recent weakening of the New Zealand dollar against the company's main trading currencies would be positive for earnings, but the full benefit would not be seen until the 2010 year.

Despite more challenging retail conditions in the latter part of the year, sales continued to grow in the company's Australian retail segment, rising 11.4 percent to $198.5m.

Australian retail earnings before interest and tax (ebit) was up 15.9 percent to $41.2m, with the company opening five new stores during the year to take the total to 107.

For the New Zealand retail segment sales grew 2 percent to $65.6m, Pumpkin Patch said.

The New Zealand retail ebit grew 0.2 percent to $12.7m, while three stores were opened and one Urban Angel store merged into an existing Pumpkin Patch store, taking store numbers at July to 52.

British retail sales rose 15.8 percent to Stg22.7m, or in NZ dollar terms were up 9.4 percent to $59.4m.

British retail ebit loss before quota was $200,000, but after taking the quota into account was $2.4m, compared to a gain of $1.2m the year before.

Of 30 stores opened longer than 12 months, 18 generated positive ebit contributions at store level before quota costs, the company said.

During the year five new British stores opened, taking the total to 35.

US retail sales were up 63.2 percent to $US20.9m, or in NZ dollar terms up 50.6 percent to $27.3m.

The US retail environment had been tough, with conditions difficult for new entrants who did not have an established brand presence.

During the year the company opened 16 US stores, taking the total to 34 across eight states.

The ebit loss was $6.3m before quota and $8.9m after quota.

Of 18 stores open for more than 12 months, 10 made positive ebit contributions at store level before quota costs.

Turnover in the wholesale and direct segments was up 17.8 percent to $59.4m.

Sales growth was achieved in local currency terms across most markets but was affected by high exchange rates when sales were converted back to the NZ dollar.

Ebit excluding quota for the year was up 11.7 percent to $17.4m. Including quota it was up 10.6 percent to $15.5m.

During the present year, the company intended opening at least four stores in Australia, and another four stores in this country.

Just one store was committed to in each of Britain and the US.

Pumpkin Patch shares were unchanged at $1.49 in late-morning trade, having fallen from a year high of $3.42 a year ago.

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