Billabong in buyout wish
BILLABONG chairman Ian Pollard has offered shareholders a grim ultimatum: accept the Boardriders buyout offer or face a dramatic restructure that may not end well.
Releasing the company’s half-year results to the market yesterday, Mr Pollard revealed a net loss after tax of $18.4 million for the six months to December.
Billabong’s gross margins were up 100 basis points to 52 per cent, but first-half earnings were $19.3 million, down 19.1 per cent year-onyear.
The company will not pay a dividend for the half and confirmed full-year guidance of between $51.1 million and $54 million.
Mr Pollard said the Boardriders Inc offer of $1 per share represented certainty for shareholders, with founder Gordon Merchant and major investor company Centerbridge Partners both intending to vote in favour of the scheme.
“Approval of the scheme by shareholders will avoid serious ongoing risks and uncertainties associated with Billabong’s business – both operational risks and risks associated with the current capital structure, including refinancing risk,” he said in a statement.
“While Billabong has made significant operational progress in recent years, this progress has been slower and more difficult than anticipated….”
Mr Pollard said the board had considered selling assets, raising equity and refinancing to address the company’s debt levels.
“These options offer less certainty, particularly in an environment where debt funding for retail-oriented companies is proving to be very difficult,” he said.
“The board believes that the Boardriders offer provides both a superior outcome for shareholders – and a far more certain one.”
The results revealed the Americas as the highlight in an otherwise dim half, with pre-tax earnings in that region growing 34.1 per cent.
Europe and Asia Pacific were down 29.4 per cent and 9.2 per cent respectively.
When split by brand, RVCA was up 9.6 per cent, while Billabong itself was down 0.5 per cent and Element plunged 13 per cent.