Global Brands expects massive loss this year
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A big swing to a loss is expected by apparel group Global Brands Group Holding for its latest 12 months, to the end of March.
A preliminary assessment of its accounts indicates a net loss attributable to shareholders of between US$70 million and $75 million.
This compares to a net profit attributable to shareholders of about $90 million for the previous 12 months.
Global Brands says the expected loss is primarily the result of one-off impairment charges from the write-off of a receivable arising from a loan made by the company, as well as impairment charges on various intangible assets. Also, a major licence expired during the year. Exceeding $100 million, the impairment charges and receivable write-off were non-cash adjustments.
The company expects to release its annual results late next month.
Questions & Answers
Q.What is the primary reason for Global Brands Group's expected financial loss this year?
What is the primary reason for Global Brands Group's expected financial loss this year?
The expected loss is primarily due to one-off impairment charges. These charges arise from the write-off of a loan receivable and impairments on various intangible assets, alongside a major licence expiring during the year.
Q.How does the projected loss for this year compare to the previous year's performance?
How does the projected loss for this year compare to the previous year's performance?
Global Brands is expecting a net loss of between US$70 million and $75 million for the latest 12 months. This contrasts sharply with a net profit of approximately $90 million reported for the previous 12 months.
Q.Are the significant impairment charges and receivable write-offs cash-related issues for Global Brands?
Are the significant impairment charges and receivable write-offs cash-related issues for Global Brands?
No, the impairment charges and the write-off of the receivable, which exceed $100 million in total, are described as non-cash adjustments. This means they do not directly impact the company's cash flow.
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