Pacific Brands warns on profit

Pollaers flags weaker earnings as trading conditions, increased investment weigh.

Pacific Brands (PBG) chief executive officer John Pollaers has warned shareholders the group's first-half profit may come in below expectations due to difficult trading conditions.

Addressing shareholders at the group's annual general meeting, Mr Pollaers said full-year profit was also expected to take a hit as a result.

"Based on preliminary indications and subject to ongoing trading conditions, EBIT and NPAT (before significant items) for the full year are likely to be down, with earnings outcomes largely dependent on sales performance and gross margins," Mr Pollaers said.

Mr Pollaers said while the primary reasons for lower profit was difficult trading conditions, increased investment, a continued downturn in the workwear market and the non-renewal of certain licences were also set to weigh on the company's bottom line.

However, results will be heavily dependent on second-quarter 2014 trading which accounts for the majority of earnings in the half," he said.

Separately, Pacific Brands announced it had finalised the refinancing of its existing syndicated debt facility with a new $250 million facility.

The facility comprises a revolving credit facility of $125 million maturing January 31 2017, as well as a second revolving credit facility of $125 million maturing January 31 2019.

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