Hemtex interim report: continued increased sales and improved earnings

Hemtex, the leading home textile retain chain in the Nordic region, continued its positive development during the second quarter of the fiscal year, August 1 – October 31, 2005. Profit after taxes rose 65% to SEK 24.6 M and net sales were up 30% to SEK 281.8 M, compared with the second quarter in the preceding fiscal year. Operating margin rose to 12.6% (9.6).

The continued highly favorable earnings trend during the quarter is attributable to strong customer and volume development, good cost control and improved margins on the product mix. During the first six months of the fiscal year, profit after taxes rose 116% to SEK 52.7 M. Net sales in the same period increased to SEK 526.0 M (383.4). The Group opened 12 new stores during the second quarter. In total during the interim period, the Group opened 14 new stores, of which six in Sweden, seven in Finland and one in Denmark. In addition, 12 stores were acquired from franchisees during the interim period. “We continued to maintain a high pace of expansion while concurrently working intensely with further enhancing the efficiency of the entire system, from purchasing to the stores,” says Anders Jansson, President of Hemtex. “We have strengthened our position in Sweden and Finland through establishments of new stores and strong growth in comparable stores.” “At the beginning of the third quarter, we opened two new stores in Sweden and one each in Finland and Denmark. We have also acquired two more franchise stores in Sweden. In addition, we are now realizing the plans to become established in Norway – contracts have been signed for the establishment of three stores in the Oslo area. The first store will open already in March 2006.”