Adairs gets some wind in sheets as profit up

SHARES in Adairs have surged more than a third after the manchester and homewares retailer handed down a better-than-expected profit update.

Adairs yesterday said it had returned to sales growth and would hit the upper end of its full-year profit forecast.

The positive trading update prompted a stampede for the stock, adding $54 million to the retailer’s market value.

It will come as a relief for shareholders who have endured two profit downgrades in the past year. Adairs yesterday said it expected sales for the six months to June to come in at $140.4 million – up 8 per cent on a year earlier.

The stronger second half is set to push the full-year sales tally to $264.9 million. Likefor-like sales, which strips out the impact of stores opening and closing, rose 3.8 per cent in the past three months.

It halts a sales slide at Adairs, which suffered a 2.4 per cent decline in the three months ending March and a hefty 6.8 per cent slump in the three months to December.

It now expects to deliver a full-year profit haul between $30.5 million and $31 million.

That result is towards the upper end of an earlier forecast of $27 million to $32 million but well ahead of what investors were expecting.

Chief executive Mark Ronan said the group had largely resolved issues in its key bed linen category that had led to a lacklustre turnover in the first half.