PACIFIC BRANDS LIMITED (PBG)

Business Description:
Pacific Brands Limited (PBG) is engaged in the sourcing, manufacturing, marketing, wholesaling and retailing of underwear, socks, hosiery, intimate apparel, corporate uniforms, workwear, footwear, bed linen, bedding accessories, carpet underlay, apparel and sporting goods. All products are sold throughout the Asia-Pacific region, United Kingdom, Europe, Middle East and the United States.

Strategy Analysis:
There are three key elements to the PBG growth strategy; building brand and category leadership to drive sales growth, leveraging the business scale to drive operational efficiencies and growth through category enlarging acquisitions. PBG believes its competitive advantage includes innovation to extend trusted product ranges and the capacity to effectively support and expand existing brands. The company has focused operations in the home markets of Australia and New Zealand while monitoring international developments and opportunities, remaining confident that there are sufficient domestic opportunities to continue with growth. Pacific Brands reported NPAT of $38.9m for the half-year ended 31 December 2012. This is up from a reported loss of $362.4m after significant items and represents an 8.9% increase on the result before significant items recorded for the previous corresponding period. This result reflects gains achieved through strong operating and financial discipline across the business in continued challenging market conditions. Revenues from ordinary activities were $639.2m, down 6.6% from the same period last year. Basic and Diluted EPS was 4.3 cents compared to (39.3) cents last year. Net operating cash flow was $34.29m compared to $40.62m last year. The interim dividend declared was 2.5 cents compared with 2.0 cents last year.