)
SURFWEAR retailer Billabong International (ASX: BBG) hasn't posted any surprises to the ASX.
The Burleigh Heads business is still struggling in the sales department, with total group sales down 9.5 per cent year-on-year to $508.3 million.
It took in $39.3 million in earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for significant items. This result was down 21.1 per cent.
The company is still loss-making, reporting a loss after tax of $16.1 million this morning.
Billabong CEO Neil Fiske says the result is consistent with the update to shareholders in November.
"Namely that the first half would be substantially down but we would see a lift in the second half such that we expect full year EBITDA will be ahead of the prior period on a comparable basis," says Fiske.
Yesterday, Billabong announced it had sold women's brand Tigerlily for $60 million. The business was initially acquired in 2007 for $5.8 million.
Fiske says the company is paying down debt - Tigerlily will pay off around $7 million of its $186.1 million - and also 'simplifying' its portfolio.
Cost of doing business was down nearly 4 per cent on a comparable basis.
"There are three key aspects to the first half result that give us confidence going into the remainder of the year. First, there is a strong profit lift in the Americas as we enter its seasonally bigger second half. Gross margins in the region were up 170 basis points overall year-on-year."
Billabong's digital strategy is showing green shoots, as its social efforts translated into online sales over the period. Ecommerce grew 17.7 per cent to $4.9 million for the half, but it only accounts for 2.1 per cent of total sales.
To facilitate digital growth, Billabong has promoted Stacy Reece to the newly created post of senior vice president digital commerce and customer experience, who will report to Fiske and work closely with chief information officer Chris Conrad.
Billabong will be updating shareholders with revised full year guidance, taking into account Tigerlily's prior $8 million contribution.
The company will be reducing its previous guidance, where EBITDA was estimated to be in the $60 to $65 million range.
Business News Australia
)
)
)
)
)
