Winter Sports sales for the first six months where ahead of the comparable period in 2011 by 2.6%. This, however, is not a key delivery period for the division and consists mainly of close out sales and some deliveries of bindings under contract manufacturing agreements for the next season.
Due to the very mild winter and late snow in both Europe and North America in 2011/12, sell out at retail was considerably down and some International retail chains are therefore reducing pre-season orders by 20% to 25%. The company has now collected a majority of pre-season orders and whilst declines are not as dramatic, company still has a double-digit deterioration compared to the prior year, with skis and snowboards having suffered more than boots.
The racquet sports market started the year positively in North America where company had record sales, but the worldwide growth company achieved in the first quarter of 21.3% slowed in the second to 9.9% as poor weather and lower consumer demand dampened racquet sales in Europe. The overall growth for the first six months of the year of 15.7% compared to the prior year has been achieved through higher volumes and favourable product mix in both racquets and balls, supported by positive exchange rate movements. A number of new products were introduced in the first quarter of the year, and company would not expect the current growth to continue throughout the year.
The diving sales for the first six months of 2012 grew by 6.7% due to market growth in North America and Asia and strong product lines in computers and regulators.
Sportswear sales for the six months improved by €1.0m, or 42.4% due to higher sales of Summer Sportswear.
Gross margins for the six months to 30th June 2012 have declined from 41.0% to 39.9% due to higher cost of sales driven in part by lower utilization of Alpine production facilities, increased labour rates and further investment in sportswear division. Adjusted operating loss for the six months to 30th June 2012 increased by €0.3m.
The increase in the loss was due to the higher sales being more than offset by lower gross margins and higher selling and marketing costs. The buy back and redemption of the Senior Secured Notes in 2011 has substantially decreased interest and other financial expenses due to the lower interest rates achieved. For the six months to 30th June 2012 interest and other financial costs decreased by €1.8m.
The non-cash disagio costs incurred in 2011 were due to the buy back of the Senior Secured Notes in March of that year which led to the acceleration of the amortization of the non-cash Disagio costs.
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