Vac­uum re­tailer God­freys sucks up full-year fore­cast

The Gold Coast Bulletin - - BUSINESS - SA­MAN­THA BAI­LEY

VAC­UUM re­tailer God­freys has low­ered its full-year earn­ings fore­cast range to be­tween zero and $1.5 mil­lion fol­low­ing a re­view of the com­pany’s books by its new lead­er­ship team.

The profit warn­ing — its fourth this year — comes af­ter God­freys’ 99-year old founder re­gained a con­trol­ling stake in the com­pany and shook up its se­nior ex­ec­u­tive ranks.

In a state­ment to the Australian Se­cu­ri­ties Ex­change yes­ter­day, God­freys said like­for-like sales, which strip out the im­pact of shops open­ing and clos­ing, were down 8.5 per cent for the year to date, com­pared with the same pe­riod a year ear­lier.

Like-for-like sales so far in June were down 14.8 per cent com­pared with the same pe­riod last year, it said.

God­freys said it now ex­pected to book full-year earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion of be­tween zero and $1.5 mil­lion, be­fore re­struc­tur­ing and one-off costs and year-end ac­count­ing and au­dit ad­just­ments.

Ear­lier this month, God­frey’s warned a pre­lim­i­nary re­view of the com­pany’s books in­di­cated that with­out fur­ther fi­nan­cial sup­port, the com­pany would likely have “cash flow chal­lenges” as soon as July.

Ninety-nine-year old John John­ston, who co-founded the com­pany in 1936 with God­frey Cohen, took a con­trol­ling stake in the com­pany last month, then for­mer head John Hardy was re­in­stated as chief ex­ec­u­tive.

The com­pany re­it­er­ated yes­ter­day that it was in dis­cus­sions with its prin­ci­pal fi­nancier, 1918 Fi­nance, which is con­trolled by Mr John­ston, on ex­tend­ing the limit on its $30 mil­lion se­nior debt fa­cil­ity.

“The God­freys board is seek­ing ad­vice about all op­tions avail­able to en­able God­freys to make a sub­stan­tial re­pay­ment to 1918 Fi­nance in­clud­ing a rights is­sue and will up­date the mar­ket ap­pro­pri­ately in due course,” the com­pany said.

Should Mr John­ston’s Ar­cade reach a 90 per cent stake in God­freys, it will com­pul­so­rily ac­quire all out­stand­ing shares, delist­ing the com­pany.

Mr John­ston told God­freys share­hold­ers in April that a re­struc­ture of the com­pany would be re­quired to re­store its value.

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