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Godfreys Posts 4th Profit Warning, Sales Down 14%

Specialist vacuum cleaner retailer, Godfreys, has post its fourth profit warning for the year, with full-year earnings guidance forecast to be between zero and $1.5 million – a notable drop from its $3.5 million guidance in May.

For the month of June, comparable month to date sales dropped 14.8% versus the same period last year. Like-for-like sales are down 8.5% for the year to date.

The news follows a financial review from new management, led by Co-Founder, John Johnston, who recently achieved a controlling stake in the group.

Full-year EBITDA is forecast to be between zero and $1.5 million, prior to restructuring and other costs.

In early June, Godfreys warned the market future “cash flow challenges” were likely, as new management conducted its review.

New Chief Executive, John Hardy, warned investors it was “prudent” to “not rely on previously published earnings guidance”.

Godfreys is reportedly in discussions with Johnston-owned financier, 1918 Finance, to extend the limit of 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 retailer asserts.

Should Arcade Finance achieve a 90% stake in Godfreys, it will proceed to acquire all outstanding shares compulsorily.

For several months, Johnston has been vocal about exploring a company restructure, including de-listing the retail group.

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