AUSTRALIAN CO PACIFIC BRANDS POSTS LOSS, SAYS TRADING STILL MIXED

SYDNEY, Aug 26, 2009 (AsiaPulse via COMTEX) -- PFBDF | Quote | Chart | News | PowerRating -- Australian textiles manufacturer Pacific Brands (ASX:PBG) has posted an annual net loss of $A234.3 million (US$195.56 million) and says trading since the start of the current financial year has been mixed and the outlook remains uncertain.

But the company noted recent signs of improving consumer confidence as it posted the net loss of $234.3 million down from a profit of $117.126 million in the prior financial year.

Earnings before interest, tax and amortisation (EBITA) was a loss of $175.2 million and sales revenue was down 5.5 per cent at $2 billion.

Pacific Brands Chief Executive Officer Sue Morphet said earnings were in line with guidance and the company was starting the financial year with a stronger balance sheet following its equity raising and debt refinancing.

"Reported earnings in 2008/09 were impacted by a number of significant items not related to ongoing operations," she said.

"The group booked non-cash asset impairment and write-down charges and incurred restructuring expenses associated with the implementation of the Pacific Brands 2010 strategy.

"In the past six months we have made good progress implementing our Pacific Brands 2010 strategy to transform and strengthen our business model."

She said some growth had been seen in key consumer brands such as Bonds, Berlei, Sheridan, Hard Yakka and King Gee.

Overall group sales contracted by $116.6 million as we divested businesses, discontinued brands and due to the general economic slowdown, she said.

Excluding divested businesses and discontinued brands, sales in the underlying business were down by approximately one per cent

Pacific Brands said that in the current period, the board has decided to preserve the companys capital and continue to reduce net debt.

"No final dividend will be declared or paid."

The company said that for 2008/09 underwear and hosiery sales were down 1.8 per cent at $625.6 million and EBITA, before significant items, was down 7.9 per cent at $93.4 million.

Hosiery, Bonds and Berlei grew but this was offset by declines in clothing New Zealand and holeproof.

Outerwear and Sport sales were down 2.3 per cent, and Home Comfort sales were down 13.1 per cent as tough housing and construction markets, consumer slowdown, and higher fixed cost structures in the manufacturing businesses all impacted profitability.

Sheridan and Sleepmaker were adversely impacted by softer consumer demand but Tontine was the standout performer with sales up in all channels.

Footwear sales were down 7.0 per cent but Dunlop Volley, Hush Puppies, Clarks, and Julius Marlow performed strongly.

Pacific Brands said that since the start of the financial year, trading has been mixed with some businesses performing well and others marginally down on the prior corresponding period.

"Although the economic environment and outlook remain uncertain, the company notes cautious optimism in the market and recent signs of improving consumer confidence," the company said in a statement on Wednesday.

The current financial year is expected to comprise two distinct halves.

First half underlying EBITA is expected to be down, compared to the prior corresponding period, as a result of the full impact of currency volatility in 2008/09 and the roll forward of existing contracts put in place when the Australian dollar was at lower levels.

The company expects underlying EBITA in the second half to rise primarily due to the realisation of transformation cost savings.

(AAP)lm

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