Time for some KCQs

Key Concepts and Questions

Click on 2013-2014 Annual Report for Pacific Brands
Click on 2011-2012 Annual Report for Pacific Brands

Morning all. The focus for this post is to really highlight important notes that come across the current Annual Report for the company, and expose any unsure thoughts about the information provided.

Key Concepts

Reduced earnings, higher working capital and capital expenditure plus additional restructuring costs led to an increase in net debt at 30 June 2014 to $249.1 million. (Net debt reduction is the goal for the company in the 2015 financial year)

Continuous growth in Bonds and Sheridan resulted in an increase of sales by 3.8% to $1,322.1 million for the 2014 financial year as opposed to $1,273.3 million in 2013

Earnings before interest and taxes decreased by 25.3% to $91.2 million and net profit after tax decreased by 28.2% to $53 million. Financial year of 2013 saw that EBIT fell from a profit of $122.1 million to a loss of $209.9 million.

If the company owns the brand directly, it has the potential to allow international exploitation, whereas if it didn't, the ownership is usually limited to Australia and New Zealand (In this case).

Pacific Brands are trying to invest more to the direct-to-consumer channels to maximise revenue as their results showed last year peaking at $89.7 million which went at 22.6%.

Gross margins prior to significant items dropped by 2.1 percentage points from 49.1% to 47% which was created through a higher level of promotional and clearance activities.

The cost of doing business increased in 2013 by $27.4 million making the total $530.8 million. Freight and distribution increasing by 4.8% making a difference of $5.4 million, sales and marketing jumping up $24.7 million to a 9.0% increase although administrative costs dropped $2.7 million from 2013 to 2014 with a percentage of 2.3%.

Working capital had an increase of 17.7% with a change of $46.5 million from F13 to F14. trading operations peaked $309 million in 2014.

Since F14 had poorer performance in wholesales, retail expansion investments adjacent categories and acquisitions and the fluctuating currency depreciation, inventories resulted in a rather larger quantity.

Operating cash flow pre interest and tax showed a drop of $100.9 million. Cash conversion was significantly lower in F14

Sales revenue in the statement of comprehensive income shows the sales revenue in F14 is higher than F13 by $48,776 although gross profit still remains higher in F13 reaching $620,813 as opposed to $618,363.

Questions

Not sure how cash conversion gets affected by working capital?

What is a reported loss due to impairment of goodwill and brand names?

Why does the Former Chief Executive Officer have a lower short term incentive than a Chief Financial & Operating Officer?

Hand Picked!

Blog writing can be a very difficult task, especially if you are not very tech savvy. I mean even if you are, the world of blogging is a lifestyle and just like any other, if you are new then you will struggle. I have spent some time reviewing some blogs produced by students attending the same University as myself and despite the majority of them being new to this framework, I found some very interesting candidates to add to my "Hand Picked" pile. Out of the several I have narrowed it down to a top 3.

In no particular order, number one is Charlyn Morgan. Here is a link to her online blogger: Charlyn's Blog. The primary reason I had picked Charlyn's (her preferred name being Charlie) blog as a top favourite is basically while I was reviewing everyone's blogs 90% of them had unappealing text and background colours, some of which actually irritated my eyes when I skimmed through the script. Charlie's however, I found very appealing to the eye. It was simplistic and the colour differentiation was enough to be vibrant but not bright and low toned but not dull. In my opinion, appearance is just as important as being informative. Although Charlie's blog was very informative and all the right information was there. Well Done Charlie!

Second in line is Sophie Tieman. 22 Year old studying externally and working, but that didn't stop this student from creating a great piece. The reason I picked this as a top favourite is because the entire blog was relatable. Whenever she would come across a complication I felt the effect of it. The structure of the writing was well done and unlike others the student has displayed it in a true 'blogging format' which is quite engaging. I found the colour scheme appealing just like the previous blog (I think there's something about dark red haha). Also I happen to work at Harvey Norman so I really enjoyed the read and I actually learnt something! Here is a link to Sophie's blog: Sophie's Blog if you want to check it out. Nice work Soph!     

Last but not least, my third I have chosen is written by Anudari Chimeddorj, also known as Anu.
Here is a link to Anu's blog! Anudari's Blog. From the moment I saw this student's blog I had one word to say. Immaculate. It was clean, straightforward and honest. I think that is how a blog should be set out and I had a delight reading it. The text was factual and well explained. Another decision maker that really got me was again, the look of the template. Not only was it simple, but the digital images was absolutely stellar! Placement was on point and the photography had great gradient scale portion with the background and the text. It blended into a story almost, as the background portrayed the outdoors and there were touches of a nice shade of green that suggested an environmentally friendly approach. Awesome work Anudari!

The Scope

(Video created by Pacific Brands displaying their journey)

Welcome back!

It is a delight to be able to share some insight of the research I have been working on about the well respected Pacific Brands. The video embedded above is a really interesting watch which emphasizes the passion this family has to be able to get this far and further develop an even stronger organisation into the future. The reason I mentioned the word family is because that is how this company's employees treat each other. Even though they work for separate businesses, the workers see themselves working for one company. One brand. Which personally I think is a very good indication that the company is heading the right direction.

The journey began in the middle of 2013, when a decision declared a true motive. To be able to represent a nation famous for being new and different that not only Oceania loves... but the entire world. That nation being the land of Australia. Not only did they create this colossal goal. They pursued it, and because of their belief this was attainable. A project was created by their staff to enable the company to explore a new meaning of what it meant to be apart of Pacific Brands. Sessions of employee engagements were held across the globe from places such as Hong Kong, Manchester, Melbourne, Sydney and Auckland which were designed to discover an innovative action this brand could embrace itself with. The results remained congruent throughout and they were simply to be known in the community, to create a strong statement of why it is here, and to develop a straight forward understanding of their beliefs.

As I posted previously, this company is famous for the marketing of many different brands that I'm sure we are all aware of. These consist of names like Bonds, Sheridan, Tontine, Berlei, Jockey, Voodoo and Dunlop flooring.

The Pacific Brands headquarters is located in Melbourne and they have operations running in Australia, New Zealand, China, Indonesia and the United Kingdom with over 3,500 employees.

People might question why all this for just bed linen and underwear? Why is it so necessary to be apart of something else instead of just selling products? Well, Pacific Brands reply to this by saying

"At Pacific Brands, we are more than just products and sales – we are a collective of people who are united by our desire to create unique, highly connective and valued brands."

1888 invention of Pneumatic Bicycle Tyre

The history behind Pacific Brands began in 1888, when John Boyd Dunlop invented the Pneumatic Bicycle Tyre where he followed up with the creation the Dunlop Pneumatic Tyre Company. The company opened its first factory in Melbourne, Australia during the year 1893. Thirty-six years later Dunlop started manufacturing boots made from rubber in 1929. In 1937 they branched out into the sporting goods market with the development of Empire Racket Co. Soon later Dunlop created something we now all know as the Dunlop Volley. The inspiration was founded by a tennis player alongside an employee named Adrian Quist in 1939. In 1969 the company branched out again into the underwear and socks market with the creations of Holeproof and Berlei Hestia Ltd. 1971, Dunlop acquired gros-

Berlei underwear

by and made the branded footwear business. A few years after, Pacific Brands developed as a consumer goods division from Pacific Dunlop. The position later over-arched in 1987 with the acquisition of Bonds. The year 1995 the company was introduced into the outwear market with the development of Boydex International. It wasn't until the year 2000 that Pacific Brands became a very major supplier to the 2000 Sydney Olympic Games and also created the branded footwear business with Australian licenses of Clarks and Hush Puppies. 2001 Pacific Brands joined CVC Asia Pacific and Catalyst Investment Managers and also not to forget KingGee, Razzamatazz and stubbies, with Sara Lee Apparel obtaining Pacific Brands. Soon Pacific Brands was bought in by Kolotex Hosiery in 2003. Another big year was 2004 when Pacific Brands became and addition to the ASX and NZX. 2005, the company finally became apart of Sheridan which made us sleep better at night. In 2007 Pacific Brands changed its game and became apart of the streetwear division, joining forces with Globe International incorporating brands like Mossimo, Mooks and Stussy. Suddenly in 2011 Pacific Brands decided to up their game by diving into the premium streetwear brand Diesel. All of these moments throughout history are what make Pacific Brands what it is today. There are such a wide variety of products these people take on and every time they do it with passion that is hard to replicate. Who knows what we can expect from this organisation in the future. 

If there are any unanswered questions or if you would like to visit the beautiful company of Pacific Brands a link will be provided below.

http://www.pacificbrands.com.au/

Some things to be expected for my future posts are Key Concepts and Questions I will be jotting down while reviewing my company's annual reports and also a possible Top 3 Blog favourites from other students' blogs I will be analysing. Stay tuned till next time, Ciao!  

               

Introduction

Good evening all,

I am Mori Amable. I am an undergraduate student, studying a Bachelor of Business with a major in Marketing. It has been a whole year since I have last touched on the scene of schooling, although I have to say, I am quite ecstatic to be apart of this course. The focal point of this blog is to really capitalize on key aspects of a given company we received in week one. In my case, that company being around making bicycle tyres since 1893 to now being a global phenomenon of undergarments, Manchester, infrastructure and much more! Can you guess what company supplies these goods? None other than Pacific Brands.

Further deconstruction of how this company operates and what goes on behind the scenes will be released very soon. For now, au revoir!