AILING DICK SMITH POISED TO REVEAL DEBT PLANS

AILING DICK SMITH POISED TO REVEAL DEBT PLANS
DICK Smith Holdings (ASX:DSH) this week hopes to give shareholders a clearer picture of its plans to get on top of its debt position in the wake of a falling share price.

The company's shares have been placed in a trading halt pending the announcement due on Wednesday.

Dick Smith requested the trading halt to update the market on its funding position and its debt financing covenants as its share price continued to languish at record lows despite a bumper Christmas trading season reported by the broader retail sector.

Shares in the electronics retailer slumped to a low of 35.5c a week ahead of Christmas on the back of two profit warnings in October and November.

The shares traded as high as $2.25 in May, just above their $2.20 issue price in 2013 when the company was floated by private equity firm Anchorage Capital Partners.

The company announced on November 30 that it would be posting a $60 million non-cash impairment on its December-half profit following weaker-than-expected sales over the preceding month. At the time it also warned further impairments could be recorded, depending on Christmas trading.

Dick Smith posted a net profit of $43.4 million in FY15, up 3.1 per cent on a year earlier.

At the time it forecast net profit would grow to between $45 million and $48 million in FY16, thanks to a raft of new store openings. Its most recent update in November cast doubt on this target being achieved.

Dick Smith's shares last traded at 36c.

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Advertisement

Related Stories

Federal Court finds Google misled consumers on data collection

Federal Court finds Google misled consumers on data collection

The Federal Court has found Google misled consumers about persona...

Mayne Pharma breakthrough as FDA approves new contraceptive with plant-based estrogen

Mayne Pharma breakthrough as FDA approves new contraceptive with plant-based estrogen

A bet made by Mayne Pharma (ASX: MYX) in 2019 has paid off today ...

Douugh targets Gen Y & Z investors after Goodments acquisition

Douugh targets Gen Y & Z investors after Goodments acquisition

Listed neobank and AI-driven wealth management app company Douugh...

Zip Co raises $400 million for international expansion

Zip Co raises $400 million for international expansion

Zip Co (ASX: Z1P) has priced $400 million of senior convertible n...