AUSTRALIA: Funtastic posts 2008 loss

Toy wholesaler Funtastic said earnings were hit by financial crisis and loss of ABC Learning business.
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The firm has reported an annual loss for the year of $50.8 million compared to a $5.1 million profit in 2007 after one-off costs and write-offs of $64.1 million mostly related to ABC Learning.

Earnings before interest tax and amortisation (EBITA) from continuing operations were down 3.1 per cent at $28 million and the company is predicting that figure could be lower for 2009.

Funtastic has withdrawn from its low margin generic apparel business but says the toys and sporting business increased revenue by 6.6 per cent on 2007.

Earlier this month, the firm issued a profit warning. The company is planning to restructure its operations and raise $22 million to strengthen its balance sheet and fund the $7 million purchase of Hong Kong toy manufacturer NSR.

Last year, the firm reported a first half net profit of $5.8 million, up 22.1 per cent on the previous corresponding period.

Funtastic said in a statement: "Revenue from continuing operations was down by 2.6 per cent for the year due to worsening economic conditions in the fourth quarter of 2008 and lower sales to the childcare industry mainly as a result of the receivership of the ABC Learning Care Group."

"The board (previously) advised that its EBITA outlook for 2009 was materially lower than 2008 due to the potential loss of the ABC Group related business, the softer economic environment and allowances for supply chain restructuring initiatives.

"2009 EBITA could be potentially up to 40 per cent lower than the prior year."



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