Both the Australian and the European divisions achieved growth in the year, while sales in North America were below the prior year, in single digit percentage terms, after a period of solid growth in the 2011 financial year.
The Group generated $1.7AUD million of earnings before interest, tax, depreciation and amortization (EBITDA) which, as previously reported, includes net $AUD1.0 million in other income relating to proceeds from the settlement of a legal case, compared to an EBITDA profit of $2.9 million in the previous financial year. Reduced gross margins, which are largely responsible for this decline in profitability, resulted from a combination of sales mix, competitive market pressures and an increase in cost of goods.
The last quarter of the year was also impacted by delayed footwear shipments which had been expected to arrive before the end of the financial year. Net profit after tax of $AUD100,000, compared to $AUD1.1 million generated in the previous financial year.
“We are making good progress on the majority of our longer term identified growth initiatives, even though this financial year delivered only modest profits,” said Globe International Limited CEO Matt Hill. “Through ongoing investments in product, distribution and brand diversification we have been able to generate growth in certain categories to off-set the stagnation in other areas of the business. In particular, Globe lifestyle skateboards and Globe apparel have performed well, as has Enjoi apparel and the recently launched 4Front clothing division in Australia.”On June 30 2012, the Group had available cash reserves of $10.2 million (June 2011: $12.3 million), and available financing facilities of $3.0 million (June 2011: $2.7 million). With positive cash generated from operations in the financial year, the utilization of cash during the year was principally a result of the $2.1m dividend paid on 30 September 2011
“Given difficult market conditions around the world, and specific challenges our industry faces, we are pleased that our company remains stable and debt free and that we are able to continue to invest in our brands and growth programs despite modest expectations for financial performance in the next twelve months”, said Hill.