Why Did Globe International’s Profit Slip Despite Strong Australian Performance?
Globe International Limited reported a decline in revenue and profit for FY25, reflecting a strategic shift away from non-core brands. Despite this, the company maintains strong profitability in Australia and a solid cash position, while declaring a fully franked dividend of 20 cents per share.
- Revenue down 7.2% to $206.3 million due to planned brand discontinuations
- EBIT declined 14.3% to $14.6 million with a 7.1% margin
- NPAT decreased 14.6% to $9.8 million
- Fully franked dividend of 20 cents per share declared, down from 22 cents
- Australian segment remains highly profitable; international divisions show mixed growth
Financial Overview
Globe International Limited has released its preliminary final results for the fiscal year ended 30 June 2025, revealing a modest contraction in both revenue and profitability. The company’s revenue fell by 7.2% to $206.3 million, primarily reflecting a deliberate exit from non-strategic brand revenue streams amounting to $25.5 million. Earnings before interest and tax (EBIT) decreased by 14.3% to $14.6 million, translating to a margin of 7.1%, down from 7.7% in the prior year. Net profit after tax (NPAT) also declined by 14.6% to $9.8 million.
Segment Performance and Strategic Focus
The Australian division continued to be the company’s profit engine, delivering $12.7 million in EBIT at a robust margin of 12.6%, despite a challenging retail environment. Internationally, the United States and European operations contributed $9.4 million in EBIT, marking a 15% increase in international divisional EBIT contribution over the previous year. The European segment remained flat as it undertook operational enhancements to support future growth.
Management highlighted ongoing strategic reviews of sourcing and supply chain operations as key drivers behind improved margins, even as overall sales softened. The company has expanded its supplier base beyond China and Mexico to include Vietnam, Bangladesh, India, and Cambodia, mitigating geographic risks and enhancing supply chain resilience.
Dividend and Capital Management
Reflecting its solid balance sheet and cash flow generation, Globe International declared a fully franked final dividend of 10 cents per share, bringing the total dividend for FY25 to 20 cents per share, down from 22 cents in FY24. The company’s net cash position, after accounting for working capital borrowings, stood at $19.3 million as of 30 June 2025, a slight reduction from the previous year due to dividend payments.
Governance and Remuneration
The board, led by Chairman Harry Hodge, continues to emphasize strong corporate governance and risk management. Executive remuneration saw fixed pay increases for some key personnel, including a 96% increase in the non-executive director’s fixed remuneration, the first since 2018. However, no short-term incentives were paid to executive directors in FY25 due to the company not meeting minimum EBIT-to-revenue performance thresholds.
Risk Management and Outlook
Globe International remains vigilant against a range of material business risks, including volatile retail conditions, intense competition, shifting fashion trends, supply chain disruptions, and compliance obligations. The company’s diversified brand portfolio and geographic footprint are strategic buffers against these risks. While FY25 results reflect a period of transition and recalibration, management’s focus on brand mix optimization and supply chain efficiency aims to position Globe International for sustainable long-term growth.
Bottom Line?
As Globe International recalibrates its brand portfolio and supply chain, investors will watch closely for signs of renewed growth momentum in FY26.
Questions in the middle?
- How will Globe International’s strategic brand discontinuations impact future revenue growth?
- What are the prospects for international divisions, particularly Europe, to regain momentum?
- Will the company maintain or adjust its dividend policy amid evolving market conditions?