Godfreys foresees flat earnings

VACUUM retailer specialist Godfreys has warned earnings will be flat this financial year as franchise fees fall.

The retailer, which has issued a string of profit downgrades since its float in 2014, told shareholders yesterday that it did expect an improved performance across it shops and wholesale businesses this year.

But a weakening of franchise fees would hurt overall earnings, the group said.

There was some hope for investors however, with chief executive John Hardy reporting that retail sales had stabilised in the year to June and were showing signs of improvement this financial year.

In the three months to September, like-for-like sales – which strip out the impact of shops that have opened or closed – were comparable with those for the same period last year, he said.

While Godfreys expected “variability in our like-for-like sales across any given month, we are pleased with the improving trend and turnaround in our business’’, Mr Hardy said in a statement.

“We are continuing to focus on improving the fundamentals in fiscal 2018.”

He said that on an underlying basis – which sets aside one-off items – the group expected similar earnings before interest, tax depreciation and amortisation to those of the past year. For 2017, Godfreys reported underlying EBITDA of $14.1 million.