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OrotonGroup Reports Profit Decline of Over 58%

OrotonGroup Reports Profit Decline of Over 58%
Sep 17, 2015 By Ben Visser

OrotonGroup Limited (ASX:ORL) released it’s full year FY15 results today with 2015 proving to be difficult year for the company as it records significant declines across the board.

The company reported growth in revenue of 5.7 per cent to $132 million, however statutory EBITDA came in at $10.9million, down 42 per cent on the previous corresponding period (pcp). Statutory net profit after tax came in at $2.6 million, down 69 per cent on the pcp, and statutory earnings per share came in at 6.4 cents per share, down 68 per cent on the pcp.

Underlying results do not include one of losses from the Hong Kong lease after exit of $0.8 million, losses from the closure of the Singapore office of $0.2 million and the trading losses of $1.8 million and gain on exit of $1.7 million from Brooks Brothers Australia. Total add backs come to $1.2 million approximately. This resulted in underlying EBITDA of 12.1 million, down 38 per cent on the pcp. Underlying net profit after tax came in at $3.8 million, down 58 per cent on the pcp with underlying earnings per share coming in at 9.3 cents per share, down 58 per cent on the pcp.

OrotonGroup CEO, Mark Newman commented, “FY15 was a challenging year with the results reflecting  the short term effects of repositioning our core Oroton brand to a true affordable luxury positioning, the expansion of the Gap brand and a full year of losses of the now exited Brooks Brothers Australia joint venture.”

“As we enter FY16, it is pleasing to note positive accelerating momentum form all of the initiatives that we’ve undertaken, with Group like for  like sales growth on the first 7 weeks of +11%, together with the benefit of the Brooks Brothers exit, all being supported by a continuing strng balance sheet.”

The company’s Board has declared a fully franked dividend of 2.0 cents per share, bringing the full year dividend to 6.5 cents, down 59 per cent on FY14.

ORL’s share price has declined over 38 per cent in the last twelve months. Following today’s result announcement, the company is likely to face further selling.

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Ben Visser Author: Ben Visser Sep 17, 2015

Ben is a Wise-owl equity analyst focusing on ASX blue-chips stocks. Ben has a Bachelor of Business in Finance majoring in property valuations and management. In his role at Wise-owl Ben conducts in-depth fundamental and technical analysis which helps him to find profitable investment opportunities on the ASX and abroad.

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