Brait shares keep getting a hammering

BRAIT’S net asset value (NAV) tumbled 14.8 percent in the six months to September to R66.62 a share, declining from R78.15 a share reported at the end of March.

The rout has not stopped as the NAV’s woes have continued well beyond the end of September.

By yesterday afternoon, the group’s NAV showed that it has shed another 38.91 percent in the past 46 days to R47.96 a share.

Part of the group’s problems can be attributed to under performance by its UK fashion business, New Look.

“The 26-week period ending September 23 reflects a disappointing performance, suffering from a combination of challenging market conditions and a number of self-inflicted issues,” the group said.

The group reported that its revenue for New Look decreased 4.5 percent on the comparative period. Group like-forlike sales declined 8.6 percent and UK like-for-like sales decreased 8.4 percent.

Brait responded to this under performance by changing New Look’s leadership. It announced on September 1 that Anders Kristiansen stepped down from his role as chief executive by mutual agreement.

At the beginning of November, Alistair McGeorge was appointed executive chairperson of New Look.

The group reported a loss of €532 million (R9 billion), increasing from R277m. Headline earnings a share worsened to €1.05 a share, compared with last year’s loss of €0.54.

Besides New Look, Brait has other three businesses, like Virgin Active, Premier and Iceland Foods.

Ron Klipin, a senior analyst at Cratos Capital, said the big elephant in the room New Look had for the time being been tamed, having been written down to zero value.

“There have been major management changes with previous executives of the company returning to help with a turnaround strategy. They were instrumental in a previous turnaround in the group’s performance and may be the necessary catalyst to achieve results,” Klipin said.

Klipin said there were a host of challenges, including a return to their core market of bread and butter offerings that is away from the young and edgy focus.

On other businesses, Klipin said Virgin Active seemed on track to deliver good results after a restructure of its UK operations, while South Africa is facing some headwinds.

Brait shares closed 2.03 percent lower on the JSE at R47.70 yesterday.