Globe North American Sales Drop 20%

mike lewis

August 27 2009
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Globe Logo Australian based Globe International released the results of its last fiscal year yesterday in which net sales were AUD $116.9 million ($88 mm), a drop of 3% from the previous year. Adjusting for constant currency terms, net sales were off 14 from the previous year due to a drop in sales across all regions. Sales were hit especially hard in North America, declining 20%. European sales were off 7% and Austalasia was down for 4.4%. In constant currency terms net sales were below the PCP by 14%, as the company felt the impact of the global economic downturn in all regions.

Net Profit after Tax (“NPAT”), for the financial year was a loss of A$8.9 million, with a first half loss of A$9.3 million being followed by a second half profit of A$0.4 million.

The improved results in the second half of the year are being credited to the company’s cost reduction and restructuring efforts implemented at the beginning of 2009. Globe International Limited Chief Executive Officer Matt Hill said “At the announcement of the company’s first half results in February this year, we outlined the operational restructuring and cost rationalisation plans that were being implemented. It is therefore pleasing to have seen the positive impact of these initiatives in the second half of the year despite difficult trading conditions.”

The loss for the financial year was driven by declining revenues, A$3.2 million of one-off restructuring costs and by the derecognition of A$4.7 million of tax assets associated with carry forward tax losses. The derecognition of these assets has no cash flow impact in the current or future periods. This accounting treatment does not impact the underlying value of the losses, which are available to carry forward indefinitely against future taxable profits in the relevant jurisdictions.

Matt Hill said “It is difficult to predict when a recovery will take effect, and as a result we maintain conservative expectations of trading conditions as we enter the 2010 financial year. Now though, as a business we are in a better position to deal with these trading conditions due to the changes that have been implemented over the past twelve months.”