Home / Knowledge / News / Apparel/Garments / Underlying sales performance will improve in F11, Pacific Brands
Underlying sales performance will improve in F11, Pacific Brands
27
Sep '10
Pacific Brands announced EBITA of $181.4m in line with guidance for the 12 months ended 30 June 2010 (F10). Second-half earnings were up 13.7% despite lower hedged exchange rates and more challenging retail conditions than in the previous year.

Margins were maintained, due principally to the savings from the Pacific Brands 2010 transformation program which is running ahead of plan while underlying sales for F10 were down by 5.9%. Cash flow was exceptionally strong and net debt was reduced substantially. The company also announced dividends are expected to be resumed following the 1H11 result, subject to performance, financial position and outlook at the time.

Pacific Brands' Chief Executive Officer Sue Morphet said: “As indicated to the market at the half-year results, second half earnings were up but the full-year result was down on last year. We are pleased that margins – both gross margins and EBITA margins – held steady despitethe continuing difficult market conditions and adverse impact of currency. This evidences the strength of our key brands and the benefits of our transformation program. It is a clear sign that our strategy is the right one.

“Our cash flow continued to be very strong which has enabled us to substantially reduce net debt, from $811m in December 2008 to $313m at June 2010, and also extend its maturity. This, together with our confidence in the future performance of the business, means that the board expects to resume dividends following the 1H11 result subject to performance, financial position and outlook at the time.”

Operating performance
Underlying sales were down $102m, or 5.9%, while reported sales declined by $217m, or 11.1%, for F10. More than half the decline in reported sales was attributable to business divestments and exits – our footwear business in the UK and China, Icon Clothing and Merrell ($39m) – and discontinuation of brands and labels as part of the portfolio rationalisation strategy ($76m).

Ms Morphet said: “Our overall result held up despite challenging market conditions and the extent of restructuring implemented internally. The sales result was disappointing, although we made pricing adjustments to mitigate the impact of lower hedged exchange rates and had to operate in a tougher than expected retail market, especially in the last six months. Sales to Department Stores (DS) were up and sales to Supermarkets were steady. Sales to Discount Department Stores (DDS) and other channels were down.

“Gross margins and EBITA1 margins were largely maintained, with gross margins benefiting in the final quarter from the increase in off-shore sourcing following the manufacturing closures of the previous 12 months. The transformation program also significantly reduced our cost of doing business in the second half.

“Operating cash flow2 remained strong at $290m for the year with cash conversion of 144%, driven by significant reductions in both inventories and debtors. This allowed us to reduce net debt by more than $100m (or 25%) in the last six months alone. Gearing is now down to 1.6 times and interest cover is up to 4.2 times. This balance sheet strength also enabled us to roll over and extend the maturity on our securitisation facility such that none of our debt is due until at least March 2012.”

Click here for more details

Pacific Brands Limited


Must ReadView All

Ethiopia’s Kombolcha Industrial Park attracts foreign firms

Apparel/Garments | On 15th Dec 2017

Ethiopia’s Kombolcha Industrial Park attracts foreign firms

Strategic location, modern factory facilities and proximity to the...

Courtesy: 2XU

Apparel/Garments | On 15th Dec 2017

L Catterton Asia announces JV of GXG and 2XU

L Catterton Asia, the Asian unit of the largest and most global...

15 trade associations urge nations to safeguard WTO system

Apparel/Garments | On 15th Dec 2017

15 trade associations urge nations to safeguard WTO system

Fifteen trade and industry associations from across the world have...

Interviews View All

Rahul Bhadani
Looksgud

Navigating through catalogues is a bit hasslesome

Rahuul Jashnani
Jashn

‘Online economy has changed the whole dynamics of buying habits.’

Giovanni Pizzamiglio, Paolo Crespi & Riccardo Robustelli
Epson, For.Tex & F.lli Robustelli

‘The percentage share of printing in the global textile market is pretty...

Liz Manning

<div><b>Liz Manning</b>, Business Development Manager at Catexel, has...

Hardik Sanghvi

Idealin Fogging Systems has been engaged in designing and manufacturing...

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Amiben Shroff
Shrujan

From its modest beginning in the late 1960s, Shrujan has grown into a...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

December 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.6%
No
12.0%
Skip
18.5%

Total Votes: 92

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
62.0%
No
30.4%
Skip
7.6%

Total Votes: 92

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.0%
No
9.8%
Skip
3.3%

Total Votes: 92

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.5%
No
8.7%
Skip
9.8%

Total Votes: 92


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search