Slimming Pacific Brands took a hit in the June year and on the stockmarket yesterday.
The company revealed an annual net loss of $234.3 million and warned that trading since the start of the current financial year had been mixed and the outlook for 2010 was uncertain.
But the shares fell by a solid 10.2%, or 13.5 cents to $1.185.
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.
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
The current financial year is expected to comprise two distinct halves, the company said.
First half underlying EBITA is expected to be lower, 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 savings from the cost cutting that is going on.
Earnings before interest, tax and amortisation (EBITA) were a loss of $175.2 million and sales revenue was down 5.5%t at $2 billion, the company disclosed yesterday.
Pacific Brands CEO, 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.
“Earnings were impacted by volume declines and adverse mix changes as consumers traded down, and by an increase in raw materials and input costs, partially offset by price adjustments.
"Currency also had an impact on the company’s profitability over the year with imported unit costs increasing sharply from the unprecedented currency volatility in F09.
"Our hedging program has delayed the impact by six to nine months, however, as anticipated, earnings were impacted in 4Q09.”
She said that reported earnings in 2008/09 were also impacted by a number of significant items not related to ongoing operations.
"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," Miss Mophet said.
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 company’s capital and continue to reduce net debt," she added.
Therefore no final dividend will be paid.
The company said that for 2009 underwear and hosiery sales fell 1.8% at $625.6 million and EBITA, before significant items, was down 7.9% at $93.4 million.
Hosiery, Bonds and Berlei grew but this was offset by declines in clothing New Zealand and the Holeproof business.
Outerwear and Sport sales were down 2.3%, and Home Comfort sales were down 13.1% 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 dropped 7% but Dunlop Volley, Hush Puppies, Clarks, and Julius Marlow performed strongly.
And like other infrastructure groups, ConnectEast and Macquarie Airports and Macquarie Infrastructure Group, toll road operator Transurban Group produced a loss for the June year.
But unlike its peers, it was a small $24.5 million loss instead of hundreds or billions of dollars because Transurban was one of the first of these infrastructure and property trusts to cut asset values and recast its distribution policy, and took its lumps in the 2008 financial year under the then newish CEO, Chris Lynch.
Transurban’s bottom line result was a 77.6% improvement on the previous corresponding period, the company revealed yesterday.
The group said its toll roads showed resilient traffic numbers in the June 30 year delivering a rise on toll revenue, while cost cuts had improved its balance sheet.
Toll revenue was $778.7 million in the twelve months to June 30, an increase of 7.6% on the previous year.
Earnings before interest, tax, depreciation and amortisation were $556.8 million, up 16.6% on the previous corresponding period.
Transurban declared a final distribution of 11 cents per stapled security, bringing the full year dist
