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EBIT slips 25.3% at Pacific Brands in FY14

August 27, 2014 (Australia)

EBIT and NPAT at Aussie apparel retailer Pacific Brands slipped 25.3% and 28.2%, respectively in the full fiscal year ending June 30, 2014.

Pacific Brands said, before significant items, EBIT was down 25.3% year-on-year to Au $91.2 million and NPAT also plunged 28.2% to Au $53.0 million, from a year ago.

However, driven by continued expansion in retail and online and the impact of acquisitions, sales rose 3.8% to $1,322.1 million for the 12 months ended 30 June 2014.

In the fiscal year ended June 30, 2014, Pacific Brands reported net loss after tax of $224.5 million, which it said was mainly to the impact of non-cash impairment charges and restructuring costs.

In the fiscal year under review, revenue from apparel brands like Bonds surged 19.9% and Sheridan rose 15.6%. However, innerwear earnings were down impacted by wholesale sales.

Sheridan Tontine earnings were also lower, primarily driven by increased investment in brands, new categories and capability.

Earnings from Workwear, which it recently sold to Wesfarmers continued to be impacted by significant declines in the industrial market, Pacific Brands said.

In the same period, reduced earnings, higher working capital and capital expenditure, acquisitions and additional restructuring costs led to an increase in net debt to $249.1 million.

Pacific Brands preferred not to declare a final dividend, to assist with funding restructuring costs and restore balance sheet strength.

CEO David Bortolussi said, “This has been a difficult year due to challenging markets and declines in consumer sentiment, which are reflected in reduced profitability, cash flow and balance sheet strength.

“We have responded by repositioning the company for the years ahead. The fixed cost base has been reduced and we are now focused on restoring balance sheet strength, while continuing to invest in our key brands, particularly Bonds and Sheridan.

“The operational changes, increased focus on inventory management and improved cash flows resulting from these initiatives will strengthen each business and underpin group performance and financial position.”


Fibre2fashion News Desk - India
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