"I think this six months is attributable to the work we've done over the last 18-to-24 months in reshaping the business," chief executive David Bortolussi​ said. Pacific Brands, the owner of Bonds undies and Sheridan sheets, is set to fall into US hands. Credit:Glenn Hunt "We exited some of our more challenging assets and really focused on our core brands, so we have a much higher-quality busiess now with greater growth prospects." The success sits partly on the shoulders of Pacific Brands' transition from a wholesale manufacturer to a retailer in its own right. There are now 155 Bonds stores in Australia, including 66 Myer activewear concession stores, and retail sales grew 38 per cent in the half, with same store sales growing 22 per cent.

Almost a third of all Bonds sales, which were up by $24 million to $200 million, came from its own stores and another 9 per cent come from its online store. Luxury sheet and homewares maker Sheridan saw a 10 per cent jump in sales in the first half of the 2016 financial year to $105 million, with three quarters coming from its 61 stores and 109 concession stores. Sales and earnings in Tontine and Dunlop Flooring business grew by 18 per cent and 71 per cent respectively, driven by strong activity in the housing market. Total sales across the group were $425 million in the six month ending December 31, net profit after tax before significant items was $24.3 million and EBIT was up 14.9 per cent to 36.2 per cent. Mr Bortolussi said foreign exchange depreciation remained one of the company's biggest challenges for the year ahead.

Pacific Brands was forced to increase prices in retail stores in October – which Mr Bortolussi said had not affected sales – and increase its wholesale price in January. "I don't think it's the absolute exchange rate that's the issue, it's more the volatility," Mr Bortolussi said. "I don't mind if [the Australia dollar] settles at US70¢, that's fine with me, but dropping to 60¢ and then back up to 80¢ – that's what causes difficulty to us and our competitors." The company has gone from $24 million in debt in December 2014 to being $33 million in the black. Pacific Brands' popular Berlei sports bra – endorsed by tennis star Serena Williams – go global in 2016 and be introduced to department stores in the UK and to 40 Macy's stores in the United States under a joint partnership with British bra maker Courtaulds.

"It's not easy to get distribution in those markets... so I think the early take up in the trade is really encouraging ," Mr Bortolussi said. Meanwhile 20 Bonds stores will open in the shopping centres in the Middle East during 2016. Citi retail analyst Craig Woolford said it was a "solid result with more momentum through retail stores and international growth likely in the second half." "The resumption of dividends is a good sign of the Boards' confidence in the outlook," he wrote in a note to clients. The company will pay a fully franked dividend of 1.6 cents a share on April 1.