Investors in newly single retailer City Chic will enjoy a special dividend after the women's fashion specialist shrugged off an apparent retail downturn and lifted its first-half profit by 35 per cent to $9.85 million.
In its first set of results since offloading loss-making brands Millers, Autograph, Katies, Crossroads and Rivers to rival Noni B for $31 million, the company formerly known as Specialty Fashion Group announced it will pay a fully franked dividend of 5 cents per share, including a 2.5 cent special payout.
City Chic's total revenue for the six months to December 30 rose 7.1 per cent to $75.4 million, including a strong Christmas trading period, according to chief executive officer Phil Ryan.
Shares in City Chic were trading more than 30 per cent higher at a near nine-year record of $1.38 at 1155 AEDT.
Mr Ryan said proceeds from the brand divestments back in July lifted the group's net cash position at December 30 to $35.5 million, compared $16.1 million at the end of FY18, backing up dividend recommendations.
He said City Chic would build on its new independence by expanding its online platform, roll out larger format stores and build its exclusive range.
"We have successfully transitioned to standalone IT infrastructure following the ($31 million) divestment and are now fully independent," Mr Ryan said.
City Chic has 104 stores in Australia and New Zealand, opening five new outlets during the period and closing eight Myer concessions.
Mr Ryan said City Chic had delivered positive comparable sales growth, in the early part of the second half, in line with expectations.
Australia's overall retail trade fell at Christmas after a November boosted by Black Friday sales, while tough trading conditions have resulted in a string of retailers closing in recent times, including Marcs, Pumpkin Patch, Payless Shoes and Roger David.
Ed Harry has also entered administration, while department store Myer is struggling and The Reject Shop is fighting off a takeover attempt.
Noni B, however, has continued its turnaround from near-collapse in 2014, more than doubling its first-half sales on strong Christmas trade and the Specialty Fashion acquisitions.
NEW-LOOK CITY CHIC LIFTS PROFIT
* Net profit up 35pct to $9.85m
* Revenue up 7.1pct to $75.4m
* Interim dividend 5.0 cents, fully franked, including a 2.5 cent special dividend
Share
