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'We are ready to participate in any recovery' - Billabong Chief
21 Aug '09
4 min read
Billabong International Limited announced an operating net profit after tax (NPAT) of $160.2 million for the financial year ended 30 June 2009, being down 9.2% compared to $176.4 million in the prior corresponding year. After inclusion of a non-cash impairment charge on retail assets of $7.4 million post tax, reported NPAT was $152.8 million.
In mid May 2009 the Company forecast a reported operating NPAT in the range of $160 million to $165 million, with the forecast being based on monthly average exchange rates in May and June of 75 cents for the AUD/USD and 55 cents for the AUD/Euro. The rapid appreciation in the AUD against the USD and, to some extent the AUD against the Euro, in the period following the provision of the revised forecast in mid May reduced reported operating NPAT from $163.1 million to $160.2 million before impairment charges.
The result translates into earnings per share of 72.6 cents per share before impairment charges (down 11.2% from 81.8 cents per share) or 69.2 cents per share with the inclusion of impairment charges (down 15.4%), with the reduction reflecting the reduced profit result and a rise in the weighted average number of shares on issue following the recent equity raising and the introduction of the dividend reinvestment plan during the financial year.
Group sales revenue of $1.67 billion represented a 23.9% increase on the prior year (or 9.1% higher in constant currency terms). The sales growth was amplified by acquisitions and the translation benefit from the relative weakness in the Australian dollar, primarily against the USD and Euro, throughout much of the financial year.
Gross profit margins of 53.2% (54.9% previously) remained strong, with the easing primarily reflecting the impact of the tougher economic environment in the United States.
Group EBITDA of $284.8 million eased 2.4% (down 13.9% in constant currency terms), while EBITDA margins reduced to 17.1% (from 21.7%), primarily reflecting the impact of challenging trading conditions, in particular in the United States, combined with an increased contribution from lower margin territories and acquired brands.
Billabong International Limited chief executive officer Derek O'Neill said the result reflected the swift and unprecedented economic slowdown that impacted global economies.
“Given the lack of retailer confidence, the steep slowdown in consumer spending in various global economies and the extreme volatility in exchange rates, the Company has emerged in remarkably good shape,” said Mr O'Neill.
“Highlights for the Company included the protection of brand equity as demonstrated by the preservation of gross profit margins, revenues surpassing the $1.5 billion milestone for the first time, higher cashflow from operating activities with inventory under control and a strong balance sheet with a conservative gearing ratio of 16%, so I feel we are ready to participate in any recovery.”
In mid May 2009 the Company forecast a reported operating NPAT in the range of $160 million to $165 million, with the forecast being based on monthly average exchange rates in May and June of 75 cents for the AUD/USD and 55 cents for the AUD/Euro. The rapid appreciation in the AUD against the USD and, to some extent the AUD against the Euro, in the period following the provision of the revised forecast in mid May reduced reported operating NPAT from $163.1 million to $160.2 million before impairment charges.
The result translates into earnings per share of 72.6 cents per share before impairment charges (down 11.2% from 81.8 cents per share) or 69.2 cents per share with the inclusion of impairment charges (down 15.4%), with the reduction reflecting the reduced profit result and a rise in the weighted average number of shares on issue following the recent equity raising and the introduction of the dividend reinvestment plan during the financial year.
Group sales revenue of $1.67 billion represented a 23.9% increase on the prior year (or 9.1% higher in constant currency terms). The sales growth was amplified by acquisitions and the translation benefit from the relative weakness in the Australian dollar, primarily against the USD and Euro, throughout much of the financial year.
Gross profit margins of 53.2% (54.9% previously) remained strong, with the easing primarily reflecting the impact of the tougher economic environment in the United States.
Group EBITDA of $284.8 million eased 2.4% (down 13.9% in constant currency terms), while EBITDA margins reduced to 17.1% (from 21.7%), primarily reflecting the impact of challenging trading conditions, in particular in the United States, combined with an increased contribution from lower margin territories and acquired brands.
Billabong International Limited chief executive officer Derek O'Neill said the result reflected the swift and unprecedented economic slowdown that impacted global economies.
“Given the lack of retailer confidence, the steep slowdown in consumer spending in various global economies and the extreme volatility in exchange rates, the Company has emerged in remarkably good shape,” said Mr O'Neill.
“Highlights for the Company included the protection of brand equity as demonstrated by the preservation of gross profit margins, revenues surpassing the $1.5 billion milestone for the first time, higher cashflow from operating activities with inventory under control and a strong balance sheet with a conservative gearing ratio of 16%, so I feel we are ready to participate in any recovery.”
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