Mosaic Brands has reported a 38% improvement in first half net profit to $5.4 million.
Earnings before interest and tax declined from $13.7 million to $13.1 million, with a negative impact of $4.3 million attributed to currency movement against the US dollar.
As part of a balance sheet repair strategy, the group reduced inventory intake for the half by 33%, $41 million less than the previous corresponding period.
Comparable in-store sales for the six months to December were down by 6.6%.
Sales for the first eight weeks of the current half are broadly in line with expectations, with low-cost inventory to flow into stores from March onwards.
Inventory between March to June will increase approximately 24% on the previous corresponding period, in anticipation of a strong Q4.
Outgoing CEO Scott Evans said now is a key turning point for Mosaic Brands.
“A pre-Covid track record of profitability has resumed as seen over the recent few years. The Group has delivered a $13.5m improvement over the last six months in its net current assets position and projects further balance sheet improvements for the second half of FY24 and into FY25."
The group expects to sign a refinancing package with Hilco Capital in coming weeks, alongside an in-principle agreement to extend or refinance the convertible notes with the noteholders representing the majority of notes on issue.