Egg On Lew’s Face As Myer Does Better Than Expected
In an embarrassing knock to Solomon Lew, Myer has released a trading update as the billionaire investor has been demanding – which forecasts a return to profit in the July half.
Lew and his company Premier Investments, who have been seeking to mount a coup against the Myer board, had clamoured for a trading update so investors could decide whether the board should be kept on.
The statement duly provided to the ASX today, however, predicts a net profit after tax of between $4 million and $7 million in the second half of FY21 thanks to a skyrocketing 38.3 lift in sales over those six months. This would be Myer’s first profitable July half in four years.
The forecast also tips a NPAT of between $47 million and $50 million for the full 2020-21 financial year, up from an $11.3 million loss in FY20.According to Myer CEO John King, the impact of COVID – including lockdowns, store closures, and travel restrictions – did not stop the retailer from recording a net cash position of $112 million for FY21, up from $8 million in FY20.
“Our Customer First Strategy continues to gain momentum, delivering a significantly improved full year profit result, despite the ongoing COVID impacts in FY21.
“We will provide further detailed commentary at our audited results announcement in September,” he said.
Premier Investments, which holds a 15.8 per cent stake in the company, has demanded the ouster of all three of Myer’s non-executive directors, to be replaced by two Premier nominees and an independent chair. Lew last month accused Myer of “destroying” 71 per cent of shareholder wealth since 2017.
“Since that time, Myer has had three chairmen, one executive chairman, two CEOs, numerous strategy launches and countless strategic reviews and re-launches. All the while their performance has consistently declined, disappointing their shareholders, customers and suppliers,” he said.
Myer will release its audited results next month following Board approval.