FINANCIAL PERFORMANCE
The Group's surplus after tax was $15.774m a 4.1% decrease on last year's surplus. Total sales went up from $273.151m to $306.374m, a 12.2% increase.

The New Zealand retail segment achieved a same store sales increase of 2.4% and an increased segment result of NZ$10.180m up from NZ$10.044m the previous year.

The Australian retail segment suffered from difficult trading conditions for much of the last 3 quarters and ended the year with same store sales down 1.3% in Australian dollars.The segment result was NZ$15.677m compared to NZ$17.707m the previous year.

The Canadian same store sales improved 6.9% for the year in Canadian dollars.Total sales increased 57.2% to C$12.223m.The operating loss in Canada reduced from C$767,000 to C$746,000 in its third full year of operation. However, expansion into Alberta necessitated additional retail management resource being put in place and this impacted on the segments result. The directors are satisfied with this result and more stores are planned in Canada for 2006/07.

The above flat retail performance together with increased overheads at the corporate support centre in Brisbane delivered a lower surplus for the group. However we are well positioned to leverage the store growth of 23 stores achieved during the year and to continue our philosophy of controlled profitable growth in 2006/07.

CASH FLOW
Net cash outflow from operating activities amounted to $2.360m compared to net cash inflows of $10.221m last year.

Key drivers for this increased outflow from operating activities were:

• an increase in payments to suppliers of $62.708m a 22.8% increase on last year due mainly to the stocking of 23 new stores during the year (14 stores last year) and also increased investment in stock ranges for existing stores. A higher world gold price also impacted negatively on the company's cash flow.
• an increase in income tax paid of $2.856m, an increase of 36.6% due to the increase in taxable profits in 2004/05 and resulting tax paid during the 2005/06 year.

Net cash outflow relating to investing activities was up by $1.564m to $10.408m. The key driver for the increased investing activity was the cost of constructing 23 new stores during the year compared to 14 the previous year.

Net cash inflow from financing activities was $9.092m compared to a net outflow of $8.107m last year.This increased net inflow was due to the company raising bank debt to help fund our expansion during the year and fund extensions to our product ranges.

BALANCE SHEET
Net assets increased from $61.080m at the end of the previous year to $74.759m this year. Long term borrowings increased to $62.134m from $40.163m last year. The equity ratio at year end was 42.9% compared to 46.6% last year.Total assets went up from $131.146m to $174.338m due principally to inventories increasing by $39.514m.

The working capital ratio increased from
3.5:1 last year to 3.8:1 at 30 June 2006.

Events after balance date
There were no events after balance sheet date requiring disclosure.

Shareholders' returns

• Declared dividends total 23 cents per share the same as in 2005/06.
• Shares traded between $6.55 and $8.11 ending the year at $7.62.
• Return on average equity was 23.2% compared to 28.8% last year.
• Return on average total assets was 10.3% compared to 12.8% last year.
  

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