Wheels back on Globe
January 18, 2008
This Mathew Charles story appeared in The Herald Sun on October 30, 2003, after Company Globe's AGM.
Groovy skate, street and surf wear company Globe is back in the black and on track to report a full-year profit.
The news put a rocket under the company's share price, sending it up 10, or 21.3 per cent, to 57 – still a long way shy of the $2.50 it was trading at after listing in 2001.
However, chief executive Mike Sonand, the third person in the job this year, declined to be specific.
"Profitable in the first half and improving profit in the second half,'' he said.
That follows a shocking year when Globe lost $59.7 million, prompting the company's second chairman this year, Paul Isherwood, to apologise to shareholders.
"For our poor performance, on behalf of the board I apologise,'' he said.
In further relief for shareholders, the Hill brothers – company founders, majority shareholders and board members – promised to retain a long-term interest.
However, Mr Isherwood declined to give shareholders the opportunity to hear it for themselves, insisting the brothers remained silent when share activist Stephen Mayne asked them to explain their intentions.
However, the brothers were happy to discuss the matter with the media after the meeting.
"We are long-term shareholders,'' Peter Hill said.
Mr Sonand told shareholders Globe would cut another $20 million in costs this year, which he said would allow management to focus on core brands.
Further stimulus should be provided by a skateboard factory Globe has opened in China, which Mr Sonand predicted would see the company's retail prices fall by up to 25 per cent.
Mr Hill said the company would remain focused on skateboarding, despite its disastrous acquisition of US group Kubic at a point when the heat had come out of the market.
"Our balance as a business is as a surf and skatewear, (skate) boards company and we will be true to our heritage,'' he said. ``Our direction will be where that market takes us and nowhere else.''
Mr Hill said the sports board business was a long-term growth business "without any doubt''. "If you didn't believe that, you wouldn't be a shareholder in this business.''
However, Mr Hill conceded surf products were selling more strongly than skate gear.
"That's a fact,'' he said.
"Long term, I think you will find the market is balanced in the same way we are balanced as a 50-50 business.''
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