Hemtex reports continued favorable growth

Hemtex, the Nordic region’s leading home textile chain, continues its rapid expansion. In its year-end report for the 2006/2007 fiscal year, the Hemtex Group reports a sales increase of 27% to SEK 1,471 M.

The full-year operating profit amounted to SEK 222 M (181), which resulted in an operating margin of 15.1% (15.6). An increase in the proportion of consolidated sales in retail stores, a favorable exchange rate trend and lower purchasing prices had a favorable impact on earnings.

“On the whole, the year was characterized by continued expansion and healthy sales in our stores, in the form of increases in the number of receipts and average purchases. During the fourth quarter, sales in comparable stores rose in all of our markets,” says Anders Jansson, President and Chief Executive Officer of Hemtex.

However, operating profit declined during the fourth quarter to SEK 18.8 M (23.2), primarily due to a decrease in wholesale revenues, an increase in logistical costs and the negative impact of the valuation of outstanding future contracts.

The Hemtex Board of Directors proposes a total dividend of SEK 4.85 per share for the fiscal year, including an extraordinary dividend of SEK 2.00. Hemtex has a strong financial position and this factor, combined with a healthy cash flow from operating activities, means that the Group’s capacity for continued expansion is favorable.

The Hemtex Group is maintaining a high rate of establishment and opened a total of 33 new stores during the year, of which 13 were in Sweden, 12 in Finland, one in Denmark and seven in the new market Norway. Following fiscal year-end, a store was also opened in Pärnu, Estonia.

“The opening in Pärnu proved to be highly favorable, and we are now looking for sales locations in Tallinn. We take a positive view of developments in the Baltic countries and expect to establish 20-25 stores in the region in a somewhat longer term,” continues Anders Jansson, adding:

“We have an exciting year ahead of us, with the store expansion in Norway, the opening of the first volume stores under the Hemtex & More concept, a broadening of the range in several of our stores and the establishment of operations via franchisees in Poland.”