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

CRITICS CALL FOR MORE INDEPENDENT DIRECTORS ON BLUE SKY BOARD

BLUE Sky Alternative Investments (ASX: BLA) has defended its governance and valuation processes in response to severa...

BEGA PAYS $460 MILLION FOR VEGEMITE TO BRING THE ICONIC BRAND BACK UNDER AUSTRALIAN OWNERSHIP

VEGEMITE is back under Australian ownership after Bega Cheese (ASX: BGA) agreed to buy Mondelez International's A...

GUVERA ESCAPES WIND-UP ORDER

GUVERA has avoided being wound up after a claim for a $1.78 million debt by Kwong Properties was dismissed at the ...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

Related News

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

SMES TAKE RETAIL MARKET SHARE AS CONSUMERS CHOOSE PERSONALISATION

IN a battle for the hearts and wallets of Australian consumers, it appears that small and medium retail businesses...

KNOWLEDGE WORKERS AMONG MOST SOUGHT AFTER IN 2017

BUSINESSES searching for efficiencies and improved systems are in search of knowledge workers early this year, say...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter