Billabong FY 2010/11 revenues up 13.5%, Profits drop 18.4%
Surfersvillage Global Surf News, 19 August, 2011 : - - Billabong International Limited today reported its results for the financial year to 30 June 2011. Reported global sales of $1.68 billion were up 23.8% in constant currency terms (up 13.6% in reported Australian dollar (AUD) terms) compared to the prior corresponding period (pcp). Net Profit After Tax (npat) of $119.1 million was down 6.9% in constant currency terms (down 18.4% in reported AUD terms).
The strong sales growth followed the acquisition of the West 49 retail business in Canada, the RVCA brand in the United States and the Surf Dive n Ski, Jetty Surf and Rush Surf retail businesses in Australia, improving sales trends in the US, good growth in emerging markets including Asia and significant growth in online sales.
During the 2010/11 financial year, the Group acquired major retail assets in Australia and Canada to enhance its route to market. As anticipated, this led to strong revenue growth at dilutive initial margins, which are expected to increase as the Groups strategy to lift Billabong family brand share is realised over time. It was for this reason, combined with the timing shift in the recognition of sales as a number of key wholesale accounts became company owned retailers, that the 2010/11 financial year was labelled a transition year for the Group.
In the Billabong 2010-11 financial year analyst Conference Call Derek O'Neill Billabong International Limited Chief Executive Officer said' "Were now through our transition year and I think its pretty reasonable to indicate that the strategy around the transition year generally went to plan. There were a few things that were obviously a little out of our control that impacted the business during the transition year.
- the significant deterioration in consumer spending patterns in Australia;
- the impact of natural disasters in Australia, Japan and New Zealand;
- the softening of consumer spending in Europe late in the year on the back of general economic concerns throughout the region;
- currency movements, in particular, a strong AUD which affected many things that impact our business, including tourism in Australia and even where people shop.
So, the combined effect of these, coming on top of the transition year, have certainly dampened the companys trading result and pushed the company to the bottom end of its guidance range. However, from a strategic perspective, it was a very successful year and the base how has now been set for the next phase of growth for the Billabong Group.
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