The 2008 Financial Year showed Pacific Brands to be a resilient business, delivering results that demonstrated good market and financial management in a period of deteriorating market conditions.

We have achieved this outcome by placing more emphasis on our core brands. In addition, across the company we became more effective at managing our inventory levels and working capital. As most of our earnings are cash earnings, we have been able to keep our dividend payout ratio at the higher end of our range of expectations.
Combined with better management of our working capital, our cash generation exceeded our earnings, giving us the ability reduce our debt levels and pay a healthy dividend.

As a result, we believe we enter 2009 more focused on the aspects of our business that can make a difference in this market environment. We have demonstrated that when we deliver products to the marketplace which are differentiated, the outcomes are quite rewarding. While our sales, profit and cash position have never been higher, we were not completely immune to the downturn in the retail environment.

Our principal strategy is to continue to invest in our market-leading brands as well as our people. If we do this well, we believe we will be well positioned to capitalise on these efforts over the entire cycle, especially when retail conditions improve.

As you no doubt know, we have appointed Ms Sue Morphet to replace Paul Moore as Chief Executive Officer, who retired at the end of 2007 after 30 years of a distinguished career at Pacific Brands. Prior to her assuming this new role, Sue ran our most successful division. Under her guidance, we are formulating the next stages of Pacific Brands' evolution.

As our business has broadened and increased, we elected to broaden our expertise on the board with the appointment of James MacKenzie in May 2008. James brings extensive experience to Pacific Brands, having held board positions with a diverse set of listed companies in Australia and internationally.

In addition to our responsibility to you, our shareholders, our success depends upon having a balanced view of our responsibilities to the community and its needs. We have strengthened those relationships with our community partners, not only through direct support but by supporting our people as they connect with local community groups, schools and charities.

Pacific Brands is also serious about investing in sustainable options for the future. In the past year we implemented a variety of initiatives to help reduce our impact on the environment and we have bolstered our already strong commitment to ethical trading with membership to the Ethical Trading Initiative.

Our entire team continues to work to identify the areas where we can best use our position and resources to make a difference to all our stakeholders.

Thank you for your continued support during the year. We are optimistic about the future.

I trust you will find this Annual Report informative and useful.