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ECONOMICS ASSIGNMENT:

Billabong International

Company Introduction

Products:

Surf wear, wetsuits, accessories and sports apparel.

Industry Sector:

Consumer Durables and Apparel.

Origins of the Company:

In 1973 Gordon and Rena Merchant thought of what they could contribute to the growing popularity of surfing. They started producing hand made board shorts in Burleigh heads under their flat. These board shorts were tough enough to withstand pretty much anything that was blown there way. From there, billabong was born. The next few years Gordon didn't leave his factory in north Burleigh except for essentials and from there some ground was made towards some of the big labels around. His approach to his little homespun factory kept steadily until it was practically bursting with potential and profit so he invested in a more modernized factory for production. He bought in west Burleigh were there were a lot of low pressure systems, and luckily they brought a lot of good waves which started bringing in the fat checks.

Major forms of advertisement:

although advertisement of their company is done through TV advertising, a lot of it is done through sponsorship and surfing competitions. The rip curl pro was on recently which Andy Irons won. Also the billabong pro had to be postponed due to poor wave quality. 2006 Billabong XXL Big Wave Awards Premieres Monday, June 5.

Financial details

Profit/Loss figure (summarized) for the previous 12 months:

Billabongs net profit for the year to June 30th 2006 was $145.9million up from $125.23 million in the 2005 financial year. This is a 17% rise in their annual profit.

More recently Billabong has had a 13.8% lift in net profit after tax in the latest 6 month report to 31st of December. Sales were up 26.1% to $610.7 million from $483.3 million previously. All regions reached record sales levels. NPAT rose to $90.5 million compared to $79.5 million in the previous half for the same time last year (6 month Figure).

The top 5 share holders in billabong are:

Name Number Held Percentage

Gordon Merchant No. 2 Pty Ltd 29,011,450 14.01%

J P Morgan Nominees Australia Limited 28,022,488 13.53%

Westpac Custodian Nominees Limited 23,237,179 11.22%

National Nominees Limited 18,464,986 8.92%

ANZ Nominees Limited Cash Income 11,719,388 5.66%

Corporate operations

Location of the head office

The location of the head office for billabong is 1 Billabong place, BURLIEGH HEADS, QLD, AUSTRALIA, 4220

Location of major plants/offices

* Australia

* China

* Vietnam

* Korea

* Indonesia

* Fiji

* India

* Myanmar

* Mexico

* Turkey

* Jordan

Over 98 percent of billabong product is manufactured under contract.

Major competitors who operate in the same industry sector

Billabongs

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