Globe International’s Sales Slide 4.5% in Half

 

The loss includes A$6.3 million ($4.1 million) of non-recurring expenses consisting of A$2.1 million ($1.4 million) of one-off restructuring costs; A$2.0 million ($0.8 million) of fixed contractual costs related to permanent salaries and contract events terminations; and A$2.2 million ($1.4 million) of other discretionary costs which have been.

The action sports company noted that reductions that have been achieved to date include a$3.9 million ($2.5 million) of annualized salary and wage reductions of which A$2.8 million ($1.8 million) are due to a 23% reduction in head-count; and A$1.1 million (($0.7 million) are due to salary cuts that were implemented during the period; a review of all marketing functions and activities resulting in a significant adjustment to expenditure levels in light of expected revenues and business activity; product development has been restructured and consolidated to avoid the duplication of costs worldwide; and a reduction in global property costs A$1.5 million ($970,000) due to the closure of non-performing retail operations and regional sales offices. This represents a 44% reduction in annual rental commitments versus June 30, 2008.

Chief executive officer of Globe International, Matt Hill, said “We have removed costs and have restructured a number of key organizational and operational aspects of the business resulting in additional and on-going savings. Thus we have a more appropriate cost base for business levels expected in the current economic environment.”

After-tax profits was a loss of A$9.3 million ($6.0 million) compared to the profit of A$300,000 ($190,000) a year ago. The bottom line was impacted by A$5.0 million ($3.3 million) in carry-forward tax losses.
Hill said, “With major long-term contractual commitments removed, salaries and wages decreased and marketing expenditure rationalized to match revenue, we have significantly and aggressively tackled our cost base. We know that the months ahead will continue to be tough and we will continue to maintain stringent financial controls. We do not anticipate any significant improvement in revenues for the remainder of the financial year however, with the cost reductions and cost curtailment programs we continue to maintain, we anticipate an improvement in performance in the second half of this financial year.”

At of Dec. 31, Globe had A$4.4 million ($2.9 million) in cash, with “appropriate funding in place and manageable working capital balances.” In constant currencies, inventory have reduced since June 2008 by A$0.7 million ($0.5 million).