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Chairman's report

PPGL

NZX / MEDIA STATEMENT

21 SEPTEMBER 2007

Sales Sprint by Postie Plus

(000's) 2006 2007
Sales First Half 57,947 65,173
Second Half 67,229 71,159
TOTAL 125,176 136,332
EBIT First Half 1,572 (306)
Second Half 5,177 5,676
TOTAL 6,749 5,370
NPBT First Half 1,060 (730)
Second Half 4,774 4,916
TOTAL 5,834 4,186
NPAT First Half 735 (489)
Second Half 3,189 3,222
TOTAL 3,924 2,733

The Christchurch-based family apparel retailer Postie Plus Group Ltd has reported a strong underlying lift in annual sales that contrasts with the generally flatter retail sector.

Sales rose 8.5% to $136.64m, in the year ended 31 July 2007, compared with $125.34m in 2006. The second half performance saw sales increase to $71.2m, up 5.13% on 2006.

Same store sales for the year were ahead by 2.95%.

The company also reported stronger second half earnings.

The chairman Mr Peter van Rij told NZX today, "The group's second half performance, with earnings before interest and tax up 9.6% to $5.67m ($5.17m in the prior corresponding period of 2006) represented a strong lift from the interim loss of $0.49m ($1.57m in the pcp)."

"This was a very pleasing rebound although, as previously announced, net profit after tax for the full trading year ended 31 July 2007 could not match last year's record," said Mr van Rij.

Net profit after tax was $2.73m compared with last year's $3.93m. Taxation required $1.45m ($1.91m).

Earnings per share were 6.83 cents per share, compared with 9.81 cents per share.

"We can attribute the lower annual result to:

- The first half loss of $0.49m.

- Higher stock management costs including warehousing expenses and interest costs related to increased inventory levels.

- Expenditure on infrastructure and brand development.

"Restructuring initiatives aimed at mitigating inventory build-up, and the benefits of the new SAP retail management system will assist the company going forward."

"Consumer confidence has taken several dents during the year from higher interest rates, higher food costs, increased energy charges and fluctuating fuel prices."

"We are very pleased, therefore, to report that the Postie Plus Group is achieving positive trends in gross margin and gaining its share of the apparel market."

"PPGL's results demonstrate our ability to achieve good sales in more demanding times," said the chief executive Mr Ron Boskell.

"The improvement in operating margins is at variance with the apparel retail sector generally, and indicative of an effective style strategy."

"The year began with a very challenging summer season as consumers acted cautiously in the face of several economic pressures on household spending."

The level of discretionary spending in PPGL stores held up at pleasing levels, with firm support for our three main mainstream brands (Postie+ apparel stores, Arbuckles Manchester and homeware stores and the Baby City chain).

"Emphasis on brand development through television based promotional activity is producing increased awareness. Our target customer market is focused on the New Zealand family and overall we have experienced sales momentum despite a slowing economy."

Mr Boskell said, "The introduction of the new SAP retail management system across the group during 2006-07 has been successful, although the operational overlap of two systems during the commissioning phase added costs."

"The new system is instilling new disciplines across our internal procedures and will become a strong new tool assisting us to achieve improved customer service delivery."

BRAND COMMENTARY

Postie+

"The flagship retail chain Postie+ expanded its market share in a demanding market. Increased sales of womenswear have reflected the success of the 'Looking Good Every Day" visual promotions.

New stores were opened at Nelson, Upper Hutt, New Plymouth, Whakatane, Pukekohe, Palmerston North and Kaikoura.

Arbuckles

The Arbuckles manchester chain made positive sales gains in the final quarter following the introduction of the marketing campaigns "Changing Rooms for Less" and "Desperate Housewives".

Baby City

The Baby City chain experienced significant same store sales growth combined with new stores at Pukekohe and Nelson.

FINANCIAL POSITION

The company maintained a strong financial position in the 2007 year.

Total current assets as at 31 July stood at $40.81m compared with $28.35m last year, largely comprising inventories at $37.22m ($25.79m).

Non-current assets were $16.30m ($15.84m) and current liabilities $28.27m ($15.68m).

Total equity is $28.83m ($28.51m).

DIVIDEND

PPGL's directors have declared a fully imputed final dividend of 2.5 cents per share. In conjunction with an interim dividend of 2 cents per share paid in April 2007 this makes a total dividend for the year of 4.5 cents per share.

This represents a dividend payout rate of approximately 65%. The final dividend will require $1m taking annual payout to $1.8m.

The record date for dividend entitlements is 9 November 2007 at 5 pm. Payment will be made on 11 December 2007.

OUTLOOK

The directors expect the retail environment to be demanding in the first half of the current year as cost pressures continue to erode household budgets.

Brand development is viewed as the core priority of the group.

There will be a strong emphasis on improving stockturn in the current year through more effective brand management.

A trading update will be provided by the Board at the annual meeting at Christchurch on 30 November 2007. "The Board is quietly confident that our retail strategy, applied across 117 stores nationwide, will successfully prevail should economic conditions prove demanding in 2008."

FOR FURTHER INFORMATION PLEASE CONTACT:

Mr Ron Boskell
Chief Executive
Postie Plus Group Ltd

Tel (03) 339 5700
Fax (03) 339 5701
Email: ron.boskell@postie.co.nz

v2 Report - Additional Information Supplement PPG Postie Plus Group Limited	IPOs and Investment Opportunities
Press releases NZX AND MEDIA STATEMENT 29 AUGUST 2007 Postie Plus has Positive Winter A rise in sales during July has positively impacted on the fourth quarter of the trading year for national retailer Postie Plus Group Ltd. Fourth quarter sales income, on an all stores basis, is up 2.12% at $39.0m compared with $38.19m in the corresponding period last year. All store sales for the second half are ahead by 5.13% to $70.9m (compared with $67.44m in the second half of the 2006 year). As announced in March, it will be difficult for PPGL to achieve annual results at the level attained in 2006. Our final audited profit results for the twelve months period will be released on Friday 21 September 2007. 2006- 07 2005- 06 Result +% 4th Quarter $39.0m $38.19m +2.12% Second half $70.9m $67.44m +5.13% Full Year $136.0m $125.34m +8.5% FOR FURTHER INFORMATION PLEASE CONTACT: Mr Ron Boskell Chief Executive Postie Plus Group Ltd Tel (03) 339 5700 Fax (03) 339 5701 Email: ron.boskell@postie.co.nz Mr Warren Head Head Consultants Ltd Tel (03) 3650-344 Fax (03) 3654-255 Mobile (021) 340-650 Email: headconsuktants@xtra.co.nz NZX/ MEDIA STATEMENT 22 June 2007. "Postie Plus to Change Westport Operations." The national retail group Postie Plus has today announced plans to relocate two of its three operations based in Westport to Christchurch. Mr Ron Boskell, chief executive, said PPGL had taken almost twelve months to carefully review the logistical and financial implications of continuing to base a substantial part of its national distribution from Westport. "We face tremendous competition in every aspect of the business and there are dramatic changes occurring across the retail sector in the flow of products to the shop shelves," he said. "PPGL has grown to seven locations in Westport in our efforts to manage an ever growing supply of products as our national retail chains continue to expand. "The local distribution business is too small for the size of our nationwide operation with the business volume doubling in the past 5 years and our Westport facilities cannot cope with the growth." "The stock situation is not going to get any easier as Postie's expansion continues", said Mr Boskell. PPGL proposes: - To move the school uniforms operation Schooltex from Westport and to combine its activity with the recently acquired Classmates business on one site in Christchurch. - To move the initial distribution of new stock to Christchurch - To endeavour to retain the nationwide store replenishment activity at Westport. PPGL is working with the West Coast Development Trust on possible options to make the Westport replenishment centre a competitive, efficient, operation. PPGL currently freights imported stock to Westport for onwards initial distribution to its Postie+ stores across New Zealand. The turnaround time has compounded competitive pressures. "We have decided the situation can only be resolved by moving initial distribution activities to a specialist distribution centre operator using the latest technology which has been trialled successfully with the PGGL owned Arbuckles and Baby City chains. We will achieve rapid fresh stocking of our stores and our costs will reflect only the space we actually use month by month. Significant savings are likely to be generated from the 2008 year." Mr Boskell was in Westport this morning to meet local management and the staff of the company's Schooltex business and distribution centre. "The planned changes are not a reflection on our loyal Westport staff who have worked diligently for the company for many years, or on the town's leaders who have worked hard behind the scenes to promote the concept of a new modern distribution centre. The company employs approximately 90 staff in Westport. Mr Boskell said he was not in a position to comment on the extent to which job numbers will reduce. The third party operator is the Contract Logistics business jointly owned by New Zealand Post and DHL. FOR FURTHER INFORMATION PLEASE CONTACT: Mr Ron Boskell Chief Executive Postie Plus Group Ltd Tel (03) 339 5700 Fax (03) 339 5701 Mobile: (027) 221 7561 Email: ron.boskell@postie.co.nz 23 MARCH 2007 Small Loss by Postie Plus Group PPGL Half Year Results For Half Year Ended 31 January 2007 Current Previous Half Year Half Year $'000 $'000 Sales 65,174 57,947 Operating (loss) / profit (306) 1,572 Operating Resukt(% to sales -0.5% 2.7% Net Surplus/Deficit (488) 735 Funds employed 23,600 25,504 Postie Plus Group Ltd today confirmed its 22 February guidance in announcing that a bottom-line loss of $488,000 was recorded for the first six months ended 31 January 2007 after discounting for the late start to the summer season. PPGL sales for the half-year were ahead 12.47% on an all stores basis at $65.18m, and this represented a significant advance on the prior corresponding period when sales rose 4.90% to $57.90m. "The sales performance is a positive confirmation that customers continue to strongly support the group's three mainstream brands (Postie+ apparel stores, Arbuckles manchester and homeware stores and the Baby City chain) ," said the chairman Mr Peter van Rij. "In a challenging summer season, marked by fluctuations in discretionary spending by consumers, the significant sales growth achieved overall was pleasing." GROUP STRATEGY The emphasis on inventory control continues the resulting clean stock position, enabling the group to place fresh autumn-winter season ranges onto the sales floor significantly ahead of the usual timing. "Early indications in the second half year confirm this strategy is successful with a resulting improvement in performance. "The group continues its long-term logistics management strategy improving operational efficiencies and reducing inventories. "Good progress was also made towards the implementation of SAP retail management information technology that from the second half of the year will provide a world-class platform for reporting and managing group-wide performance." BRAND COMMENTARY PPGL has three major retail brands with operations in each separate business supported by centralised group purchasing, distribution, marketing and financial management. Postie+ "Postie+ expanded sales in a competitive market, whilst electing to trade away some margin to ensure the apparel division would be clean of summer stocks by the end of the season. This has resulted in less clearance of summer stock early in the second half," said the chief executive Mr Ron Boskell. "The acquisition of the Classmates brand from Ezibuy and its integration into the Schooltex activity of Postie+ for the new school year has been successful and further promoted the Schooltex brand. "New stores at Upper Hutt and Kaikoura, opened during the period, take the total number of Postie+ stores to 74 nationwide at the end of the first half." Arbuckles "The Arbuckle chain of 32 manchester and homeware stores continues to benefit from new strategies, with good acceptance by consumers of the Changing Rooms for Less concept." Baby City "The Baby City chain of 14 nursery and children's apparel/equipment stores maintained and expanded its segment leadership with excellent sales growth." DIVIDEND The directors consider it prudent to declare a dividend of 2 cents per share (fully imputed), payable on 27th April 2007 to shareholders registered on 10 April 2007. This compares with the interim dividend of 3 cents per share paid for the first half last year. OUTLOOK "The traditional pattern for the Group is to experience a higher level of sales in the second half-year," said Mr van Rij. "The strategy of keeping inventories clean at the conclusion of the season will maintain PPGL's competitive position. "PPGL has recorded an encouraging level of profitable sales in February and is positioned to target a good recovery in profitability in the second half under normal trading conditions. Given the continued economic uncertainty it is premature to provide specific earnings guidance. "However, it will be difficult for PPGL to achieve annual results at the level attained in 2006." FOR FURTHER INFORMATION PLEASE CONTACT: Mr Ron Boskell Chief Executive Postie Plus Group Ltd Tel (03) 339 5700 Fax (03) 339 5701 Email: ron.boskell@postie.co.nz Mr Warren Head Head Consultants Ltd Tel (03) 3650-344 Mobile (021) 340-650 Email: headconsultants@xtra.co.nz
Chairman's report PPGL NZX / MEDIA STATEMENT 21 SEPTEMBER 2007 Sales Sprint by Postie Plus (000's) 2006 2007 Sales First Half 57,947 65,173 Second Half 67,229 71,159 TOTAL 125,176 136,332 EBIT First Half 1,572 (306) Second Half 5,177 5,676 TOTAL 6,749 5,370 NPBT First Half 1,060 (730) Second Half 4,774 4,916 TOTAL 5,834 4,186 NPAT First Half 735 (489) Second Half 3,189 3,222 TOTAL 3,924 2,733 The Christchurch-based family apparel retailer Postie Plus Group Ltd has reported a strong underlying lift in annual sales that contrasts with the generally flatter retail sector. Sales rose 8.5% to $136.64m, in the year ended 31 July 2007, compared with $125.34m in 2006. The second half performance saw sales increase to $71.2m, up 5.13% on 2006. Same store sales for the year were ahead by 2.95%. The company also reported stronger second half earnings. The chairman Mr Peter van Rij told NZX today, "The group's second half performance, with earnings before interest and tax up 9.6% to $5.67m ($5.17m in the prior corresponding period of 2006) represented a strong lift from the interim loss of $0.49m ($1.57m in the pcp)." "This was a very pleasing rebound although, as previously announced, net profit after tax for the full trading year ended 31 July 2007 could not match last year's record," said Mr van Rij. Net profit after tax was $2.73m compared with last year's $3.93m. Taxation required $1.45m ($1.91m). Earnings per share were 6.83 cents per share, compared with 9.81 cents per share. "We can attribute the lower annual result to: - The first half loss of $0.49m. - Higher stock management costs including warehousing expenses and interest costs related to increased inventory levels. - Expenditure on infrastructure and brand development. "Restructuring initiatives aimed at mitigating inventory build-up, and the benefits of the new SAP retail management system will assist the company going forward." "Consumer confidence has taken several dents during the year from higher interest rates, higher food costs, increased energy charges and fluctuating fuel prices." "We are very pleased, therefore, to report that the Postie Plus Group is achieving positive trends in gross margin and gaining its share of the apparel market." "PPGL's results demonstrate our ability to achieve good sales in more demanding times," said the chief executive Mr Ron Boskell. "The improvement in operating margins is at variance with the apparel retail sector generally, and indicative of an effective style strategy." "The year began with a very challenging summer season as consumers acted cautiously in the face of several economic pressures on household spending." The level of discretionary spending in PPGL stores held up at pleasing levels, with firm support for our three main mainstream brands (Postie+ apparel stores, Arbuckles Manchester and homeware stores and the Baby City chain). "Emphasis on brand development through television based promotional activity is producing increased awareness. Our target customer market is focused on the New Zealand family and overall we have experienced sales momentum despite a slowing economy." Mr Boskell said, "The introduction of the new SAP retail management system across the group during 2006-07 has been successful, although the operational overlap of two systems during the commissioning phase added costs." "The new system is instilling new disciplines across our internal procedures and will become a strong new tool assisting us to achieve improved customer service delivery." BRAND COMMENTARY Postie+ "The flagship retail chain Postie+ expanded its market share in a demanding market. Increased sales of womenswear have reflected the success of the 'Looking Good Every Day" visual promotions. New stores were opened at Nelson, Upper Hutt, New Plymouth, Whakatane, Pukekohe, Palmerston North and Kaikoura. Arbuckles The Arbuckles manchester chain made positive sales gains in the final quarter following the introduction of the marketing campaigns "Changing Rooms for Less" and "Desperate Housewives". Baby City The Baby City chain experienced significant same store sales growth combined with new stores at Pukekohe and Nelson. FINANCIAL POSITION The company maintained a strong financial position in the 2007 year. Total current assets as at 31 July stood at $40.81m compared with $28.35m last year, largely comprising inventories at $37.22m ($25.79m). Non-current assets were $16.30m ($15.84m) and current liabilities $28.27m ($15.68m). Total equity is $28.83m ($28.51m). DIVIDEND PPGL's directors have declared a fully imputed final dividend of 2.5 cents per share. In conjunction with an interim dividend of 2 cents per share paid in April 2007 this makes a total dividend for the year of 4.5 cents per share. This represents a dividend payout rate of approximately 65%. The final dividend will require $1m taking annual payout to $1.8m. The record date for dividend entitlements is 9 November 2007 at 5 pm. Payment will be made on 11 December 2007. OUTLOOK The directors expect the retail environment to be demanding in the first half of the current year as cost pressures continue to erode household budgets. Brand development is viewed as the core priority of the group. There will be a strong emphasis on improving stockturn in the current year through more effective brand management. A trading update will be provided by the Board at the annual meeting at Christchurch on 30 November 2007. "The Board is quietly confident that our retail strategy, applied across 117 stores nationwide, will successfully prevail should economic conditions prove demanding in 2008." FOR FURTHER INFORMATION PLEASE CONTACT: Mr Ron Boskell Chief Executive Postie Plus Group Ltd Tel (03) 339 5700 Fax (03) 339 5701 Email: ron.boskell@postie.co.nz
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