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Myer Holdings Report Profit of $77.5 Million and a 2 for 5 Share Offer

Myer Holdings Report Profit of $77.5 Million and a 2 for 5 Share Offer
Sep 01, 2015 By Ben Visser

Myer Holdings Limited (ASX:MYR) released its full FY15 results, along with the announcement of a share entitlement offer.

Myer has launched a fully underwritten 2 for 5 accelerated pro-rata non-renounceable entitlement offer to raise approximately $221 million, at an offer price of $0.94. The objectives of the offer is to reduce core debt and provide balance sheet flexibility to implement the ‘New Meyer’ strategy annoucned today.

CEO and MD, Richard Umbers commented, “Today’s announcements’ are a significant step forward for Myer. The Board and management have taken prudent action to reset the balance sheet and add financial flexibility to the business.”

For FY15, the company reported total sales growth of 1.7 per cent to $3.2 billion, up 1.1 per cent on a comparable store sales basis, with 2H total sales gaining 1.9 per cent or 1.3 per cent on a comparable store sales basis.

EBITDA came in at $223.2 million, down 11.6 per cent, with EBIT coming in $133.5 million, down 16.7 per cent on the (pcp). Net Profit after Tax declined 21.3 per cent to $77.5 million, with underlying earnings per share of 13.2 cents, down 21.4 per cent on the pcp.

Statutory earnings per share was reported at 5.1 cents per share, down 69.6 per cent on the pcp. Statutory earnings were affected by Individually Significant Items (post-tax) of $47.7 million. In light of the capital raising the company declared no final dividend for FY15, however the Board intends to declare a divined following 1HFY16, subject to financial performance.

Mr Umbers commented, “Myer’s FY2015 results supports the case for our comprehensive change agenda. The decisions we have taken to deliver New Myer will lead to changes to both our store network and operations, resulting in a more productive and efficient footprint.”

Going forward, as a result of significant investment into future growth initiative’s, the firm expects to return to sustainable profit growth following FY16, with FY16 NPAT guidance between $64 to $72 million, excluding the implementation costs associated with New Meyer.

As a result of poor, yet expected earnings, and the announcement of a capital raising, it is fair to expect a decline for Myer’s share price today. The share entitlement is at a price of $0.94 cents, 21 per cent below Myers closing price yesterday of $1.21.

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Ben Visser Author: Ben Visser Sep 01, 2015

Ben is a Wise-owl equity analyst focusing on ASX blue-chips stocks. Ben has a Bachelor of Business in Finance majoring in property valuations and management. In his role at Wise-owl Ben conducts in-depth fundamental and technical analysis which helps him to find profitable investment opportunities on the ASX and abroad.

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