AUSTRALIA: Loss-making Billabong unveils new strategy
- FY net loss of A$275.6m versus A$119m profit
- Revenue down 7.9% to A$1.55bn
- CEO unveils transformation strategy
Surfwear business Billabong has unveiled a four-year transformation strategy after recording a full-year loss of A$275.6m in the 12 months to 30 June.
Revenues were down 7.9% at the Australian business, currently the target of a A$694m takeover bid from US private equity firm TPG Capital.
Billabong’s profits were hit by more than A$330m of costs, without which the company would have made a profit of A$33.5m, boosted by online sales growth of about 50%.
“At an underlying trading level, the group remains profitable,” said newly appointed CEO Launa Inman.
“The group is well on track in implementing the initiatives outlined in the previously announced Strategic Capital Structure Review and will continue to implement a number of new strategic initiatives announced today as part of Billabong’s Transformation Strategy.”
The four-year strategy aims to return Billabong to positive sales growth and to deliver EBITDA more than 2.5 times greater than that recorded in fiscal 2012.
The main strands of the strategy include simplifying the business, leveraging Billabong and other key brands, realising the strategic potential of retail, expanding e-commerce and integrating the supply chain.
TPG has submitted a A$1.45 a share offer for Billabong and is currently conducting due diligence on the company, but Billabong has said the offer does not reflect the “fundamental value” of the business.
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