A boomer of a June half has been had by Globe International, the Melbourne-based designer, producer and distributor in the board sports, street fashion, outdoor and workwear clothing and products.
In a late update to the ASX on Thursday, the company revealed that its second half performance was “beyond expectations” with sales rising so sharply that full year revenues look being up 66% on 2019-20.
Earnings will also be higher with the company reporting a trebling in profit margins from the 4.8% in the December half year.
The company dropped the update unto the ASX around 3.21pm – the shares hardy moved – up 1% in the next few minutes, but in the final half hour of trade they added more than 9.7% to end the session at $5.40. They did get to a day’s high of $5.43, taking the shares back to where they were in late March.
The improvement is contrary to guidance given in February with the interim results that while “profitability would remain strong… it was expected to be lower in the second half of the financial year, compared to the first half-year, due to rising product costs and investments to support and fuel sales growth.”
As it reported on Thursday that is no longer the case and Globe said it “can confirm that sales in the second half of the year will be approaching double the same period last year.”
“As a result, full year sales are expected to be in excess of $250 million, compared to sales of $152.8 million in the prior financial year.
“Due to the strength in top-line growth in the second half of the financial year, profitability is also ahead of expectations.
“The Company now expects the full year EBIT percentage return on net sales to be in the mid-high teens. This compares to EBIT returns of 4.8% in the prior financial year, and 16.8% in the first half of the current financial year,” Globe said in its statement on Thursday.
Globe said this improvement has come despite questions about the reliability of the supply of goods, predominantly from China.
“As the end of the financial year approaches, the reliable supply of incoming goods continues to be a challenge, with the latest issue being significant delays in key global logistics routes.
“However, the Company has so far been able to overcome these COVID related sourcing and logistics challenges, resulting in a strong performance for the half-year which is ahead of expectations,” Globe said.
Globe plans to announce its full year results in mid-August.