BILLABONG TAKES A BREATH AFTER 15% PROFIT DROP

Written on the 30 March 2010

BILLABONG TAKES A BREATH AFTER 15% PROFIT DROP

BILLABONG International has recorded a 15 per cent decrease in net profit to $69.7 million in the first half - down from $82.4m on the corresponding period.

US consumer caution and fluctuating currencies has led to revenue falls of $87.4 million to $723.6m. The US equates to 50 per cent of company revenue.

Billabong CEO Derek O’Neill told goldcoastbusinessnews.com.au, that despite a difficult global retail landscape, the Gold Coast’s No.1 company was still able to perform in line with guidance. However, currency was the rogue set to have hammered global sales.

“We could not have had a worse year in currency, I have been CEO for seven years now and I have watched currency erode overseas sales,” he says.

“The Aussie dollar will remain buoyant and from the profit translation side, obviously the rising dollar makes it look worse than the year before. Opportunity becomes relevant by June 2010/11 with the benefit of buying with a stronger Australian dollar.”

Billabong experienced strong growth in European territories, including Germany (double digit growth) and central European countries, while Australia had sales growth of around 4 per cent compared to the corresponding period.

But In Spain the company recorded a double digit decrease in sales.

“We operate around the world and running out and buying a t-shirt when you’re worried about your job is not a strong priority,” says O’Neill.

“In North America there were some signs of improvement in the company’s own retail operations, but business remained relatively challenging at the wholesale account level.”

Billabong shares, which had outperformed the market this year, fell 3 per cent to $10.31 in early trading today, before steadying to $10.60.

“It’s a difficult result to digest but over a period of time, shareholders will be comforted by the fact that we’re a global brand and that we have a strong balance sheet. I never worry too much about the share price. (But) we are long way off our highs and we still have some work to do.”

Billabong reaffirmed its full year guidance of 5 per cent NPAT growth or 10 per cent currency growth.

O’Neill predicts organic growth over the next 12 months.

“We will be opportunistic as things arise, but don’t plan any acquisitions in the short-term,” he says.


Latest News

2017 BRISBANE TOP COMPANIES REVEALED

WHILE Queensland is regarded as an economy in transition with the winding down of the mining boom, the 2017 top 50...

2017 BRISBANE TOP COMPANIES 1-10

FROM insurance and banking to travel, gambling, retail, property and pizza, these "heavyweights" have ha...

2017 BRISBANE TOP COMPANIES 11-20

RETAIL, property, an airline, cars, real estate, software services, energy, agriculture, veterinary services bathr...

2017 BRISBANE TOP COMPANIES 21-30

JEWELLERS Michael Hill International listed in 2016 with a half-billion dollar market capitalisation and a new CEO...

Related News

FURNITURE DISRUPTOR SET TO SHARE HIS ONE OF A KIND BUSINESS MODEL

IT'S no secret that Australians love homemaking. Their ceaseless quest to create the perfect place to call hom...

WEEDING OUT THE ASX'S BURGEONING CANNABIS TREND: 8 COMPANIES TO WATCH

A NICHE is budding on the ASX in the form of medical cannabis, an industry which has been on the country's rad...

FRESH CLASS ACTION TO REVEAL ANOTHER SIDE OF SLATER AND GORDON DOWNFALL

ACA LAWYERS has issued a formal letter of demand to Andrew Grech (pictured), managing director of Slater and Gordo...

STARSHIPS WERE MEANT TO DELIVER DOMINO'S PIZZA

NICKI Minaj may have been off the mark when she declared 'starships were meant to fly'. However, she m...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter