Pacific Brands has revealed a $108.7 million loss for the for the first half of 2014-15, but its Bonds and Sheridan labels have been a saving grace for the retailer.
Sales at socks and jocks brand Bonds were up 15% for the period, while sales at sheets retailer Sheridan were up 14%.
The company said the latest results were weighed down by a $138.5 million writedown, due to “a change in approach and currency depreciation”.
“We have been working hard in challenging market conditions, endeavouring to stabilise earnings and improve cash flow,” said chief executive David Bortolussi in a statement.
“However, the significant drop in the Australian dollar over recent months places increasing pressure on the industry, which will need to respond operationally and also through price increases from the winter 2016 season when most hedge books unwind.”
But the results were better than a year ago, when Pacific Brands lodged a $219 million loss for the same period.
SME confidence on the rise
Over half of small business owners agree their business’ financial situation is better than it was this time last year, according to research released today.
The February Westpac-Melbourne Institute Small Business Index shows small business confidence was up for the latest quarter, rising by 0.8% to 124.0 points from 123.0 in November.
“This result is attributed to a number of factors including: the lower Australian dollar which is encouraging domestic spending; falling petrol prices; and expectations of an interest rate cut, which eventuated earlier this month,” said Julie Rynski, Westpac’s general manager of small business.
The index measures the confidence, current performance and future plans of the Australian small business sector by surveying 300 small business owners across Australia.
It has increased by 3.8% over the past 12 months, indicating small business has maintained an optimistic outlook despite the current political and economic climate.
Shares down on open
Aussie shares have traded lower this morning, as the mid-year reporting season kicks into full swing.
But Michael McCarthy, chief market strategist at CMC Markets, said “unusual behaviour” among local stocks point to stronger trading patterns to come, underpinned by relative stability in the prices of oil, copper and iron ore.
“Stock such as Commonwealth Bank and Domino’s Pizza have risen over the last five trading sessions, regardless of any potential negatives,” McCarthy said.
“This suggests a re-weighting by major global investors into Australian shares. The driver here is not the share price, but the currency adjusted price, and while the AUD sits below 80 US cents the support is likely to continue.”
The S&P/ASX benchmark was down 20.6 points to 5868.1 points at 12.06pm AEDT. On Monday, the Dow Jones closed 46.97 points higher, up 0.26% to 18019.4 points.