Wednesday 25th October 2017
|Text too small?|
Smiths City Group has delayed a planned $5.7 million capital return to shareholders a second time as increasingly tight trading conditions prompted the retail chain to downgrade its first-half earnings outlook.
Christchurch-based Smiths City won't consider the capital return until 2018 as stiff competition and the need for more investment in its transformation programme led the board to maintain a more conservative capital structure. The retailer already delayed plans to pay 72 cents per share in a compulsory acquisition and cancellation of three shares in every 20 over outstanding regulatory issues, having first floated the return in June.
The retail environment has attracted strong competition, especially in consumer electronics, digital products, and whiteware, and Smiths City said revenue will likely fall 3 percent in the six months ending Oct. 31 from the $113.9 million reported a year earlier, implying first-half sales of about $110.5 million.
"We expect group profitability to be lower than the same six months last year, with a weaker retail performance partially offset by a strong performance from our finance operations," chair Craig Boyce said in a statement. "In the face of these challenges, it is appropriate the company maintains a more conservative level of gearing. The Smiths City board has resolved to review the position during the 2018 calendar year."
In August, Smiths City said there was a significant opportunity in expanding the high margin finance division, which delivers the lion's share of the company's earnings.
The company's shares were unchanged at 62 cents.
No comments yet
Goodman opts for underwritten $150m placement to raise capital
NZ dollar opens higher as dairy prices lift, oil eases
Napster's Sean Parker yet to seek OIO approval for Weta Digital stake
18th September 2019 Morning Report
Dairy product prices advance, bolstered by milk powders
MARKET CLOSE: NZ shares gain: F&P Healthcare rallies on big volume, Synlait extends gain
NZ dollar mixed after RBA says its ready to cut rate if necessary
OMV granted marine discharge consent for Great South Basin
More detail needed on migrant worker policy, big employer says
Briscoe Group says outlook uncertain