The Warehouse Group – Update on Guidance YE 28 July 2019

To: Market Information Services Section
NZX Limited
The Warehouse Group Limited
26 The Warehouse Way
Northcote, Auckland
New Zealand

UPDATE ON GUIDANCE FOR THE YEAR ENDED 28 JULY 2019
Auckland, 25 July 2019
Earnings guidance revised upwards

Adjusted Guidance for FY19 Financial results

The Warehouse Group is in its final week of trading tor the FY19 financial year, the results for which are
scheduled to be released on 25 September 2019. The process of preparing its statutory accounts for the
12 months to 28 July 2019 has not yet commenced.
Despite a warmer start to the winter trading season in H2, a combination of improved trading performance
and transformation projects indicates that full year results will be above the guidance range previously issued
on 19 March 2019. The Warehouse Group is consequently revising its guidance for adjusted net profit after
tax for the year, to a range of $67m-$70m which is up on previous guidance of $63m-$66m. This
represents a 14%-19% increase in adjusted net profit compared to the 12 months ended 29 July 2018.
The forecast result includes a full accrual for this year’s Short-Term Incentive Plan, the final outcome of
which is subject to various performance review processes and the completion of the audited accounts. At
this time, it is not possible to confidently estimate the level of the incentive expense however it is likely that
the full payout will not be realised. This would further improve the expected adjusted net profit result,
possibly above the revised guidance range.
Improvement in Net Debt

At half year we reported net debt of $153.1m, down 9.5% when compared to H1 FY18 and an expectation
that this reduction would continue. A range of initiatives to improve working capital efficiency and inventory
levels has resulted in further improvements in the Group’s net debt position. We expect net debt to be
$60m-$80m at balance date, which has reduced our financing costs, and creates more flexibility for the
Group in the future. Net asset backing per share is expected to remain similar to FY18 but our return on
capital employed will be significantly improved.

ENDS

As at the end of June 2019, the Warehouse Group Limited has 93 Warehouse stores, 77 Noel Leeming
stores, 70 Warehouse Stationery stores and 18 Torpedo7 stores. The Warehouse Group had turnover of
$3.0 billion in FY18 and employs over 12,000 people.

Contact details regarding this announcement:

Media
Jessamy Malcolm Cowper, Head of External Communications, to be contacted via
media.enquries@thewarehouse.co.nz or mobile: +64 27 275 2834

Investors and Analysts
Jonathan Oram, Group CFO to be contacted via
Kim Russell: +64 9488 3285 ext. 96725 or on Mobile: +64 21 452 860