Oroton Profitable

Submitted by Share Trading on 12 March, 2010 - 00:51

Oroton (ORL), an upmarket Australian fashion house, has found that even during the global financial crisis, women were still in the market for pricey upmarket handbags and accessories. Sally Macdonald, the Oroton Chief Executive joined Oroton Group in September 2006 when the company reported a $9.4 million loss a result of high costs, underperforming brands and a string of dud acquisition deals under the leadership of controlling shareholders the Lane family. Fastforward to 2010 and the company booked an increase of 24 percent on the previous corresponding period recording a net profit of $15.4 million for the first 6 months to January 23.

The company will issue a dividend of 22 cents (up 37.5 percent), with EPS at 37.9 cents(+23.6%) and sales of $81.6 million, up 9.8 percent. The CEO believes that the company is in the "affordable luxury segment" which is in between the expensive luxury European brands but above the high street, cheap alternative brands. The CEO also sold three brands, closed underperforming shops, cut staff by half and cut fixed head office costs while pumping more money into the core Oroton and Polo brands.

Polo division had a decline of 6.1 percent, while the Oroton division gained a 18.5 percent interim sales growth. The Oroton brand includes handbags, wallets, shoes and accessories.

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