PACIFIC BRANDS FLASHES A PROFIT
Written on the 16 February 2016 by Melbourne Business News
JOCKS and socks retailer Pacific Brands (ASX: PBG) has rebounded into the black, flagging a sales increase of 8.6 per cent.
CEO of the Melbourne business, David Bortolussi, says the result supports his earlier comments that fiscal year 2015 'marked a turning point'.
Bonds, Berlei, Sheridan and other key brands underpinned sales, and retail sales were up despite wholesale sales being held flat.
Cost of doing business increased by $17.6 million to $176.2 million due to continued retail investment, upping brand marketing and restructuring costs, which includes shifting production to Asia and exiting more than 300 non-core brands.
Reported NPAT was up $133 million on the prior corresponding period to $24.3 million without feeling the brunt of any impairment charges this time.
For the first time in two years, Pacific Brands will pay a dividend to its shareholders - 1.6c per share fully franked.
"At our full year results and AGM, I said that F15 marked a turning point in the sales and earnings trajectory of Pacific Brands and I am pleased that our 1H16 results have demonstrated it," says Bortolussi.
"Sales and earnings were up in every operating group. This combined with our strong cash flow and increased net cash position have enabled us to reinstate dividends with a payout ratio of 60 per cent."
Bonds' total sales grew 6.3 per cent to $268.7 million from the previous corresponding period, and Sheridan's grew 10.2 per cent to $105 million.
Meanwhile, Tontine and Dunlop flooring welcomed a sales increase of 18.1 per cent to $51.7 million.
Bortolussi says second half results will largely depend on May and June, the company's big sales months.
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