Globe International saw effectively flat revenues of A$97.8 million ($73.7 mm) for the first half of fiscal 2007, but manged to double EBITDA to A$2.5 million ($1.9 mm), up from A$1.2 million ($0.9 mm) during last year's half. These results include the Streetwear division, which was sold to Pacific Brands.
The Group net loss after tax for the half year of $3.1 million was largely as a result of one-off costs of $3.3m relating to the realignment of the restructured continuing business. Prior to the inclusion of these nonrecurring items, the continuing business showed a $3.5m turnaround on the prior corresponding period, with EBITDA of $0.05m. Group NPAT before one-off costs for the half year at $0.2m is a positive turnaround of $0.9m on the PCP loss of $0.7m.
The Chief Executive Officer of Globe, Matt Hill, said that the result is a concrete example of the recent turnaround in the core Globe business, particularly in North America. Revenues for the continuing Globe business increased by 6% to $61.8 million.
Mr Hill said “We are now starting to see the benefits of the restructuring, marketing initiatives and investment in the Globe brand and continuing businesses that we have undertaken over the previous two years.
“The significant turnaround at the EBITDA level that we have reported is an indication of the impact that our recent cost management initiatives have achieved together with the sales momentum we are now seeing in all regions.
“Following the sale of Streetwear, our cost base has been realigned without adversely impacting our marketing and product development initiatives,” Mr Hill said.
Sale of the Australian Streetwear Business
The previously announced sale of Globes Australian Streetwear business to Pacific Brands was successfully completed on 2 January 2007. Final consideration for the sale was $41.2 million. The terms of the sale included the assignment of the companys lease of its building in Port Melbourne to Pacific Brands. Globe will be relocating its Australian headquarters to St Kilda.
The continuing business comprises Globe and Gallaz apparel and surf/skate footwear brands, the PSC retail chain, and the companys skateboard hardgoods and apparel business.
In other Globe news, Philip Brass, a Director of the company since 2003, has chosen to retire from the Board effective February 26, 2007.
The Chairman of Globe International, Paul Isherwood, said, “Philip has been an outstanding Board member and on behalf of my fellow Directors, I thank him for his contribution and wise counsel.
“Following Philips decision, I am delighted that Mr Richard Alcock has accepted an invitation to join the Board”
Mr Alcock is a former Senior Partner, Head of Governance, and Chairman of the Ethics Committee of the law firm Allens Arthur Robinson, with wide ranging experience in the financial services industry and in the media, communications, sports and entertainment industries. Mr Alcock is also a Company Director of a range of ASX publicly listed and unlisted companies and managed investment schemes with interests in Australia and South East Asia.
Mr Alcocks other Directorships include Chairman of Allco Managed Investment Funds Limited and a Director of Art Exhibitions Australia Limited, Sydney Children's Hospital Foundation Limited, The University of New South Wales Foundation Limited and Stadium Australia Club Limited.
“Following the sale of Streetwear, the realigning of the asset base and the proposed capital restructure, Globe is now well positioned as a far simpler, better focused international boardsports footwear, hardgoods and apparel business,” Mr Hill said.
“With its stable of premium proprietary global brands and operations in the key centres of North America, Europe and Australia, together with well established distribution channels, Globe is positioned for further growth.
“The challenge for the Company now is to fully grasp the opportunity that we have as a result of a strong balance sheet, a clear focus and the recent investments in our brands that have positioned the Company very strongly in our core market,” Mr Hill said.