Greek toy seller Jumbo sees profit down 24%

Jumbo SA, Greece's biggest toy seller, sees full-year net profit falling 24% as consumption shrinks in the austerity-hurt country, Chief Executive Tolis Vakakis said on Thursday.
"We have provided a guidance of 60 mln euro net profit for this fiscal year. We are saying this is still within our budget," Vakakis told Reuters in an interview.
"Consumption is dropping twice the pace of GDP contraction," he said. "This means that if GDP shrinks by 4%, consumption will decline by 8%."
This would be the second consecutive year of shrinking profits for Jumbo, which reported a 17% profit drop to 79 mln euros in the year through June, hurt by a one-off corporate tax, sales tax hikes and wage cuts imposed by the cash-strapped government to obtain an EU/IMF bailout.
The Greek economy is expected to shrink 4.2% in 2010.
Jumbo, which runs 50 outlets in Greece, Cyprus and Bulgaria, expects to increase revenue by 2% in fiscal 2011 as it accelerates store openings. It has said VAT sales tax hikes will cut its gross profit margin by 6 percentage points to 48%.
Sales in Jumbo stores increased marginally in October and November compared with the first quarter which ended in September, but are seen down in December, Vakakis said.
The company has spent 45 mln euros to open six new stores in Greece this fiscal year. "We have delivered on the six new outlets we had promised," said Vakakis. "We have still another four to five years of network development ahead of us."
Jumbo will invest another 40-45 mln euros in the next fiscal year to open another six stores. They will be financed out of the company's own capital, Vakakis said.
Vakakis castigated the government for failing to heed some retailers' demands to allow all shops, not just those in central Athens, to open one more Sunday this month, on December 12.
"Why do Bulgaria and Cyprus work on Sundays and we don't?" Vakakis said.
Jumbo paid out a 0.189 euros dividend per share last year but is not sure it will do so again for the current year, after the government said it would hike the tax on distributed earnings to 45%.
"We have said that if the measures announced by the government to punish dividends will be implemented … we won't pay out a dividend," he said.
Jumbo shares, down 40% this year against a 30% drop in the Athens market, were down 0.8%.