Australian-based Globe International reported net sales for the half-year period ended December 31, 2o10, were up 4% in constant currency terms to Australian $45.9 million, but were down 2% in reported currency terms. The company drew in a net profit after tax (NPAT) of Australian $900,000 (U.S. $930,000) for the six month period—an 11% improvement over the same period a year ago, according to a report:
This underlying growth in net sales is driven by the Globe brand sales trends in both North America and Europe, off-set by the sales performance in Australasia which was impacted by poor trading conditions in the Australian retail sector during the half-year.
The Group generated Australian $1.9 million of earnings before interest, tax, depreciation and amortisation (EBITDA), compared to a profit of Australian $3.3 million in the prior corresponding half-year. As foreshadowed at the AGM in October 2010, the operating result for the half-year is impacted by adverse foreign exchange rate movements, as well as gross margin pressures due to a difficult retail environment and rising input costs.
The Group continues to maintain a healthy balance sheet, with additional cash of $1.1 million generated from operations during the half-year. As at the end of the half-year, the Group had available
cash reserves of Australian $12.4 million, additional unutilised financing facilities of Australian $3.2 million, and no debt.
Working capital continues to be tightly managed, with both debtors ageing and inventory holdings in line with internal expectations.
Globe International Limited Chief Executive Officer, Matt Hill, said that the underlying growth in net sales was encouraging but conditions remain challenging.
“Despite positive revenue trends, the macro economic conditions in all regions remain volatile. In addition the downward pressures on profitability due to foreign exchange rates and gross margin pressures experienced in the first half are expected to continue to impact operating profits during the second half of the financial year.”