WITH four years of turmoil and more than a $1.3 billion in losses behind it, the Gold Coast's former market darling Billabong (ASX:BBG) has finally scratched out a full-year profit of $4.2 million.
The result is a milestone for the company which has been in the throes of a much publicised turnaround strategy driven by its new private equity major shareholders.
However, the bottom-line result, which compares with a $233.7 million loss in FY14, has been heavily supported by a falling Australian dollar.
Billabong's profit figures this year have proved complicated due largely to the inclusion of many businesses that have since been sold.
The latest profit for the year to June 30 was delivered on a 14.4 per cent rise in reported revenue to $1.2 billion.
However, that figured was bolstered by revenue from SurfStitch, Swell, West 49 and DaKine, all of which have been sold.
Taking a look at what's left in the group, continuing business recorded a 0.6 per cent fall in revenue in constant currency terms to $1.048 billion. In reported terms, which includes exchange rate gains, that figure is up 2.6 per cent.
EBITDAI (earnings before interest, tax, depreciation, amortisation and impairments) from continuing operations in constant-currency terms is down in all regions except Europe.
Asia Pacific posted a 12.2 per cent fall in EBITDAI to $29.4 million, the Americas dell 9.6 per cent to $27.1 million and Europe rose to $5.59 million form a $1.44 million loss a year ago.
Retail sales in the Asia Pacific were down 3.2 per cent on the previous year on a comparable store basis and gross margins were flat.
The company closed 20 under-performing stores in the Asia-pacific during the year and opened 17 new stores under its mono-brand strategy.
US-based Billabong CEO Neil Fiske gave an upbeat perspective on the latest result to shareholders.
"Two years into our turnaround Billabong is back to full-year profit and back to doing what it does best building great global brands," Fiske says.
"Growth has returned in our key US market and Europe is again profitable.
"Challenges remain but this result confirms our confidence in the resilience of our brands and provides the conviction to see through the complex changes we're undertaking globally to deliver sustained, long-term profitable growth."
Fiske notes that Billabong saw strong growth in the US wholesale market with sales accelerating in the second half.
"While this remains a complex challenging turnaround in an uncertain economic environment, on balance more things are working for us than against us," he says.
In the current financial year to date, North America trade has been mixed across the board for the sector, while Europe is trading above expectations. Asia Pacific is also improving in line with last year.
Billabong is not paying a dividend.
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