Myer trouble grows worse
ASX calls trading halt on shares
SHAREHOLDERS of struggling retailer Myer have been handed more ammunition to fire at the besieged board after an embarrassing standoff and backflip when the company was forced into a trading halt by the Australian Securities Exchange.
The ASX prevented Myer’s shares trading yesterday because of concerns the company was not meeting its disclosure obligations.
The trading halt was put in place after the retailer issued a statement that it was not in breach of listing rules and that there was no additional information to tell shareholders.
The statement was in reaction to the leak of turnover and profit information that indicated the company’s sales had continued to decline.
After a day of suspended share trading, Myer finally issued an update last night that confirmed its turnover in the October quarter had declined.
“Myer advises that Q1 FY19 total sales value was 4.8 per cent below the previous corresponding period, down 4.3 per cent on a comparable store basis,” the statement from chairman Garry Hounsell and chief executive John King said.
It also reiterated the company would not chase turnover on unprofitable items “just to hit our top line sales numbers”.
“The AFR article contains unlawfully leaked, draft and incomplete financial information taken from an unapproved internal document relating to part of the Myer business,” the statement said.
Mr Hounsell also said Myer’s underlying net profit for the quarter showed “an improvement” on the same quarter in the previous year.
“Myer has solid cash flow and has reduced net debt by $7 million compared to the previous corresponding quarter,” he said.
Yesterday’s disclosure dispute and trading halt stems to May when Myer told shareholders it would no longer publish quarterly updates about its turnover and profit position.
Instead it would report every six months, as required by most listed companies.
However, the lack of information fuelled speculation the company was experiencing a further decline in turnover.
Myer’s largest shareholder, Solomon Lew’s Premier Investments, was unavailable to comment last night, however, he has previously called on the Myer board to release the quarterly information and has consistently raised concerns about the poor performance of the company.
Mr Lew has also proposed all board members be removed and has called for a spill motion at the annual meeting on November 30.
In its latest full year, Myer reported a net loss of $486 million, compared with a $12 million profit in 2017.
However, after stripping out one-off costs, it reported an underlying net profit of $32.5 million, down 50 per cent compared with the previous year’s underlying profit.
Mr Lew, a former Myer chairman, has been a constant critic since he started to amass a major shareholding in the company in March last year.
Its shares have fallen from 71 to 45 cents in the past year.