![]() However, the report went on to state that "Postie Plus remains in breach of its banking covenants and expects to remain so for the foreseeable future" and "a number of parties have expressed an interest in Postie Plus' recapitalisation process". The latter report stated that bank debt had been reduced to $12.1 million on Februfollowing the sale of its SchoolTex brand to The Warehouse for $9 million. Meanwhile, Postie Plus has been struggling and its 2013 annual report was late as was its interim 2014 profit announcement to the NZX. ![]() These are the reasons why Briscoe continues to raise its dividend while Pumpkin Patch no longer pays one. On the same date Pumpkin Patch had $55 million of debt, $1.8 million of cash, operating lease commitments of $117.4 million and ebit of only $4.9 million for the previous 12 months. Similarly, NZX-listed Renaissance Corporation has been shackled with ongoing operating lease commitments after selling its Yoobee Apple computer retailing operation.īriscoe and Pumpkin Patch are two large listed retailers at the opposite extremes of the debt and lease commitment obligations spectrum.Īt the end of January Briscoe had no debt, cash of $84.4 million, operating lease commitments of $106.4 million and earnings before interest and tax (ebit) of $45.2 million for the previous 12-month period. They also reduce the price a retailer will receive when it sells a chain of stores, as experienced by Postie Plus when it sold Arbuckles and Babycity. These large lease commitments can be a huge drain on retailers because they curtail their ability to restructure or close poorly performing stores. There is a strong argument that retailers should have little debt if they have large operating lease commitments yet Postie Plus had bank debt of $16.8 million and lease commitments of $26.4 million at the end of its 2013 year. Long-term operating lease commitments, which are usually included at the end of the notes to the financial statements, are non-cancellable lease obligations to external property owners. In 2007 Jan Cameron, the founder of Kathmandu, started accumulating Postie Plus shares and the following year shareholders approved the sale of Arbuckles to Cameron.ĭebt and long-term operating lease commitments are two of the biggest issues facing all retailers. This started the slow but steady selldown of Postie Plus shares by Dellaca family members. The Dellaca-controlled company, which owned 50 per cent of Postie Plus, was liquidated and shares in the listed company distributed to Dellaca family members. The listed company's first rationalisation occurred in the 2005 year when most of the large Rendells stores were converted to Postie Plus outlets and the smaller Rendells outlets were closed. The company's share price was trading at around $1 12 months after listing as net earnings for the year ended Jwere below the prospectus forecast, after taking into account restructuring costs. Unfortunately that was its all-time high. ![]() ![]() ![]() Postie Plus attracted no significant institutional shareholders but its share price finished its first trading day at $1.25 on relatively high turnover of 2.46 million shares. Richard Dellaca and John Dellaca, grandsons of the original Postie Plus founder Thomas Dellaca, were executive directors. ![]()
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