Pacific Brands, the Australian clothing maker that sold its Sleepmaker and Dunlop Foams business to Sleepyhead this year, has reported a full-year loss of A$131.5 million ($166 million), with its cost savings initiative unable to reverse losses from weaker sales and one-time charges.
The net loss for the 12 monthsended June 30 compares with a profit of A$53.2 million in the previous year, mainly reflecting impairment charges of A$235.3 million related to non-cash writedowns, one-off transformational costs and divestments, the company said.
Stripping out significant items, pre-tax earnings rose 4.6 per cent to A$189.7 million in the year. Sales fell 7.3 per cent to A$1.6 billion.
"The prevailing headwinds in the retail sector are presently masking some substantial underlying improvements we are making within the business," said chief executive Sue Morphet.
"Our decision to source more of our products offshore and manage with a leaner cost base was critical to the improved [underlying] result and will also help us deal with the significant cost pressures and other challenges we expect in the current year."
The Melbourne-based company warned that next year's earnings are expected to come in lower than the 2011 results.
The company's business segments, underwear and hosiery, reported an 0.8 per cent decline in sales to A$493.6 million through the discontinuation of non-core brands, although earnings before interest, tax and amortisation rose 11.4 per cent to A$111.3 million in the period.
The company resumed dividend payments, declaring a fully franked dividend of 3.1c per share. Pacific Brands shares were unchanged at 80c on the NZX yesterday.
