PacBrands in $285m loss

SYDNEY - Pacific Brands has posted an annual net loss of A$234.3 million ($285 million) and says trading since the start of the current financial year has been mixed and the outlook remains uncertain.

But the company noted recent signs of improving consumer confidence as it posted the loss - down from a profit of A$117.1 million.

Pacific Brands said that in the current period, the board has decided to preserve capital and continue to reduce net debt and "no final dividend would be declared or paid".

Underwear and hosiery sales were down 1.8 per cent at $625.6 million and earnings before interest, tax and amortisation (ebita) before significant items, was down 7.9 per cent at $93.4 million.

Hosiery, Bonds and Berlei grew but this was offset by declines in clothing in New Zealand and Holeproof. Outerwear and sport sales were down 2.3 per cent, and home comfort sales were down 13.1 per cent 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. Footwear sales were down 7 per cent but Dunlop Volley, Hush Puppies, Clarks, and Julius Marlow performed strongly.

Pacific Brands said that since the start of the financial year, trading had been mixed with some businesses performing well and others marginally down on the prior corresponding period.

The current financial year was expected to comprise two distinct halves. First half underlying ebita was expected to be down 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 transformation cost savings.

- AAP