Globe International Limited reported profits were approximately flat for the twelve months ended June 30, in line with expectations. Operating cash flows were significantly ahead of the same time last year, despite a downturn in revenues.

Highlights (figures are in Australian dollars):

  • Revenues for the financial year of $140.5 million were 7 percent or $10.3 million below the pcp (5 percent down in
    constant currency).
  • Earnings before interest, tax, depreciation and amortization (EBITDA) of $6.1 million for the financial year
    were $0.6 million below the pcp.
  • Net profit after tax (NPAT) of $5.1 million for the financial year was $0.3 million above the pcp.
  • Cash-flows generated from operations during the period were $10.6 million, representing a $14 million
    improvement on the $3.4 million used in operations in the pcp.

Financial Performance
The decline in net sales was largely due to the downturn in the Northern Hemisphere skateboard hardgoods
market, particularly in the first half of the year. In the second half, constant currency sales were flat compared to
the prior corresponding period, with growth in apparel brands and the bottoming out of the hardgoods decline.
Despite the decline in net sales, NPAT of $5.1 million was 7 percent above last year due to higher gross margins, lower
costs and a lower effective tax rate. A brief overview of performance by region is included below:

  • The Australian division continued to be the stand out performer. Net sales, mainly in streetwear and
    workwear, were 14 percent higher than the prior period.
  • Restructuring of the North American division continued during the year leading to a change in brand and
    category mix, improved margins and a lower cost base. Of note was the introduction of Salty Crew from 1
    January 2017, which contributed to second half sales being 2 percent higher than the prior corresponding period.
  • The European business was most affected by the hardgoods downturn, with a 36 percent decline in net sales
    over the full year. Despite the substantial decline in net sales, the division remained profitable with sales
    stabilizing by the end of the year.

Financial Position
During the current financial year, a number of initiatives were undertaken to successfully reduce the working capital
needs of the business, including a targeted reduction in months’ stock on hand for key at-once businesses. The net
effect was a substantial improvement in operating cash flows, with $10.6 million generated in the current financial
year compared to the $3.4 million cash used in operations in the 2016 financial year.

The Directors have determined that a fully franked final dividend of 5 cents per share will be paid to shareholders
on 22 September 2017, which takes the full year dividends to 8 cents, compared to 6 cents which was paid in
relation to the 2016 financial year.

Looking Forward
Chief Executive Officer Matt Hill said, “As a function of our ongoing brand diversification, margin improvement
strategies and effective initiatives to reduce costs and improve working capital, the business held up well over the
financial year, despite the decline in net sales. Looking forward, we anticipate a return to revenue growth in the
2018 financial year.”

The company is structured into six business divisions: Globe, Dwindle Distribution, Salty Crew, Hardcore Distribution, 4Front and FXD.