ASB MAGAZINE: Privately held Rip Curl Group has posted a net profit after income tax of $9,857,000 for the financial year ended June 30, 2018 returning strong dividends to its shareholders during the financial year. Despite difficult trading conditions in many markets, which attributed to a 2.4% decline in sales, we remained true to our brand focusing on full price sales and strong margin over volume. Dedication to our strict distribution and pricing policies gave rise to short-term sales and margin reduction, but ensures long-term protection of the brand, its products and its people.
“Quality sales and disciplined working capital management have allowed us to continue to effectively manage the brand and stay true to our surfing roots as we approach our 50th year in the surf industry,” said Michael Daly, Group CEO. “We continue to invest in R&D of core products, run world class surfing events in both hemispheres, sponsor world champion surfers including Mick Fanning, Tyler Wright and Gabriel Medina and provide a career surfing pathway for thousands of juniors world wide,” he added.
The main dilution to earnings was the write down of investment in its multi brand operations in Australia and further investment in South Africa. As such Rip Curl recognized a once off impairment charge of $7.9m, which accounts for much of the earnings reduction.
“Adjusted for the impact of one off items, our underlying profit result for 2018 was in line with that of 2017. A tightening of consumer spending in some markets has hurt revenues slightly, but we remain in a good position to search for growth in new markets, direct to consumer channels and to continue making fewer, better products for our customers on the beaches and mountains of the world,” said Daly.
The Group was also successful in its refinancing strategy during the year, which has seen it obtain certainty over its financing facilities for a further three-year term.
As it heads to December Rip Curl expects solid earnings in the Christmas and summer Southern hemisphere periods and is excited for the final stop of the World Surf League with Brazilian Gabriel Medina leading the men’s rankings in the race for his second professional surfing world title. Current women’s world champion Tyler Wright is out of the race and sidelined with injury. The showdown begins on December 8 at Pipeline in Hawaii and will gather the focus of surfers and customers worldwide in this period.
VIA PRESS RELEASE