Business Description:
Pacific Brands Limited (PBG) manufactures, sources, markets, and sells consumer lifestyle brands across underwear, hosiery, sleepwear, intimate apparel, footwear, bed linen, bedding accessories, bedding, carpet underlay, foams, corporate uniforms, workwear, streetwear, lifestyle apparel and sporting goods. All products are sold predominantly in Australia and the Asia Pacific region.

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 a net loss of $131.9m for the year ended 30 June 2011, due mainly to the impact of non-cash impairment charges announced at the half-year results, and restructuring costs associated with the Pacific Brands 2010 transformation program. Revenues from ordinary activities were $1.61bn, down 7.3% from last year. Basic and Diluted EPS was (14.2) cents compared to 5.7 cents last year. Net operating cash flow was $94.69m compared to $135.28m last year. The final dividend declared was 3.1 cents, taking the full year dividend to 6.2 cents compared with nil last year. Earnings in FY12 are expected to be below FY11, particularly in 1H12, however the company is well placed to deal with the challenges ahead of it and then benefit from any improvement in market conditions.