Pacific Brands is a resilient business and performed well in 2008 delivering 16.3% sales increase and 18.1% increase in earnings before interest, tax and amortisation. Our results were in line with the growth guidance we provided at the start of the year. We were particularly pleased to have increased our second-half profit despite declining retail conditions.

Australian like-for-like growth, excluding Clearance Stores was 2.5%, affected by weaker second-half retail market conditions. Conditions in New Zealand were difficult. Our newly integrated businesses, the Yakka Group and Brand Collective have both performed well and to expectation.

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Our Underwear and Hosiery brands are the clear market leaders in Australia - a market which we grew 3.3% during the year. Bonds and Rio are Australia's number 1 and 2 women's underwear brands. Berlei, Bonds and Hestia are the number 1, 2 and 3 women's intimates brands, while Bonds, Holeproof and Rio are the country's number 1, 2, and 3 sock brandsⁱ. Brand and product strength enabled Underwear and Hosiery to successfully focus on profitable growth - total sales grew 1.2% over the prior corresponding period, but profit grew 8.2%.

Bonds was a key category driver and had another record sales year. Five major campaigns were successfully conducted through the year - each supporting new exciting ranges and innovations - the ‘Kaleidoscope' women's youth range, Baby EasySuit, the Mash range of mix and match tops/bottoms, the now ubiquitous Hoodies and the Patty Cake Hi & Lo range.

The Berlei brand in Australia also improved its position with its highly successful ‘Great Shape Bus' campaign. The brand now has the highest affinity level among consumers for women's bras as well as the highest advocacy and biggest core loyalty groupⁱ.

Berlei's reputation as a leader in bra design and innovation was further cemented by an endorsement from the Australian Institute of Sport who revealed that the Berlei High Performance Sports Bra is the bra of choice by female athletes at the Institute.

Radio and television personality Fifi Box was appointed brand ambassador for Rio men's and women's underwear. Television ads featuring Fifi coincided with her role on Dancing With the Stars and were well received.

Playtex have also recently appointed Kate Cebrano as their brand ambassador and in the coming year will use Kate's image to strengthen the brand.

Our hosiery brands have also performed well, leveraging from the continuing popularity of the ‘leg wear' trend. Voodoo and Razzamatazz were among the key brands that released new styles and colours throughout the year to capitalize on the trend. We believe that the ‘leg wear' trend will continue in the next period and we will continue to support our hosiery brands to ensure they are the fastest to market with new and improved ranges.

Outerwear and Sport sales and profit increased sharply during the year.

As predicted, growth in the division was strong, significantly heightened by the first full year of our acquisitions of Brand Collective and Yakka Group, both of which have been completed and integrated seamlessly into the business.

In line with last years' results, Brand Collective is continuing to perform to plan, increasing its number of flagship retail stores throughout Australia and overseas. Yakka Group has exceeded expectations, having achieved its best sales month ever in May 2008.

The acquisition of Yakka Group has also significantly boosted the Workwear division of Outerwear and Sport and we now own the number one and number two industrial workwear brands in Australia: Hard Yakka and King Gee.

Our Business to Business (B2B) division of the Workwear Group continued to perform strongly supported by the following businesses: Yakka, CTE, NNT and Dowd. Our holistic approach to Total Apparel Management has enabled success in winning new contracts whilst simultaneously retaining existing accounts. A number of our key contracts have been retained, including Bendigo Bank and NSW Fire Brigade and we have also secured numerous contracts for new clients including Westfield Australia, New Zealand and UK, Singapore Airlines and NSW Police. We will continue to identify opportunities to expand our business in the B2B sector over the next financial year.

While the acquisitions were integrated seamlessly and contributed strongly, the underlying Outerwear and Sport businesses delivered on their promise to return to profit following the completion of a restructure.

Slazenger Sportswear delivered pleasing results, particularly in the discount department store channel. The Slazenger BioSlyx performance apparel range launched in September 2007 was exceptionally well received by the market given its high quality at a very competitive price.

Bikes have also shown strong growth throughout the year, capped off with the relaunch of Malvern Star towards the year end, with a repositioning of the brand to rebuild equity in the market. The release of the new Malvern Star Legend series, including the top of the range Oppy Le Mauco bike will drive solid growth in the category in the coming year.

Home Comfort delivered a strong profit uplift of 9.2% over the prior corresponding period.

Sheridan remains the favourite manchester brand in Australiaⁱⁱ. Brand strength and the launch of strong ranges through the year drove the business to solid growth in the first half of the year, however, manchester was more susceptible to the reduction in discretionary spending especially evident in the second half.

Sheridan released two major campaigns during the year - the black and white ‘Feel' campaign and the new ‘SHE by Sheridan' premium range. Both campaigns were well received in the market. The strength of the Sheridan brand and its product ranges makes it well placed to capitalise when market conditions become more favourable. In the coming period, the focus for Sheridan will be to increase market share profitably.

Pillows and quilts continued to sell well and delivered strong growth during the year. Tontine is Australia's number one brand for pillowsⁱⁱⁱ and has delivered solid growth throughout the year. The brand continues to connect well with consumers by releasing products that tap into needs that are important such as the BreathEASY range of bedding accessories supported by the National Asthma Council of Australia.

Our Foams and Flooring businesses remained steady throughout the year in a challenging market.

In November 2007, Dunlop Foams sponsored the first annual Young Designer Furniture Award 07, a unique design competition to encourage new ideas in the design and production of foambased furniture for the Australian youth market. The winning piece from the competition - the multi-purpose Zeus - inspired the threepiece Dusko Collection from Smith, a range of versatile micro-suede covered pieces filled with Australian-made Dunlop foam.

As previously announced to the market, Pacific Brands sold the New Zealand Foams, Flooring and Bedding businesses.

Footwear held its market share in the sporting, comfort and casual categories, but continued the declining trend from the previous year in the women's fashion category.

Dunlop Footwear, in particular, performed strongly overall with their marketing investment winning three awards at the Melbourne Advertising and Design Club (MADC) Awards - Best Art Direction for the Dunlop Industrial Campaign, Best Outdoor for the Dunlop Industrial Campaign and Best Website for Dunlop Volleys.

More importantly, the successful marketing campaign drove sales of Volleys to increase rapidly, with the brand showing strong connections to consumers of all ages. An astonishing 1.8 million pairs were sold in the 2008 financial year - up 42% from 1.27 million last year. Rising sales of the shoes can largely be attributed to Volleys' ‘Exceptionally Average' campaign that ran over Summer 2007/2008. The campaign had an extremely positive response in the market and developed a strong following on internet video site Youtube.

Merrell also grew their share in the market, expanding their range in the women's outdoor market with the Barado - a lightweight shoe using 4-way stretch fabric that led the lifestyle category.

Clarks Children's footwear also showed strong growth throughout the year, with the Perfect Fit campaign re-establishing the brand in the fashion category. Clarks continues to follow an ‘ongoing fitting' story, being the only children's brand that comes in five different widths.

Pacific Brands is highly regarded by retailers for possessing the ability to replenish footwear quickly and efficiently. During the 2008 financial year, 7 million pairs of shoes were delivered through our effective ‘pick and pack' service.