Home > Appliances > Cleaning > Godfreys Urges Shareholders To Accept Takeover Bid

Godfreys Urges Shareholders To Accept Takeover Bid

Following a recent trading halt, struggling vacuum cleaner retailer, Godfreys, has issued a profit downgrade of [at least] 30%, following a 27% drop in sales over the last fortnight.

Disclosed in an ASX announcement, the retailer’s Board has urged shareholders to accept a takeover offer from Co-Founder, John Johnston, for $0.32 cash/per share.

Mr Johnston – who is set to turn 100 years old in July – presented his offer in April, and intends to privatise the ailing retailer. The takeover offer was made via his bidding vehicle ‘Arcade Finance’.

As per its latest profit downgrade, the retailer expects an underlying EBITDA [before one-off costs] of around $3.5 million – a notable decrease from its previous update (on April 23rd) for between $5 million to $6 million.

Should sales continue to drop at a similar rate, Godfreys warns it may be forced to post another profit downgrades, and potentially default its main lender – a John Johnston owned entity.

Brendan Fleiter, Godfreys Chairman, has encouraged shareholders to accept the takeover bid, which an independent expert has deemed “fair and reasonable”.

Fleiter warns continued slow performance may “make it difficult for Godfreys to meet its obligations under its current financing arrangements”.

On April 23rd, Godfreys advised the market it had breached a debt covenant, however, warned the technical term was irrelevant as it has already received a waiver from Mr Johnston’s financing division.

According to afrMr Johnston has advised he won’t be offering any more waivers.

The news follows the appointment of new Godfreys Chief Executive, Jason Gowie, in December, who attempted to turnaround the retailer’s 222 ANZ stores.

The retailer shifted its marketing strategy in April/May to include TV campaigns which aimed to reduce its reliance on discounting. As per recent sales numbers, the strategy has largely failed to bear fruit.

You may also like
LG Shifts Gears, Refits Phone Factories For Appliances
Appliance Market Facing Shortages & Price Rises Claims Midea Executives
Aldi Selling Sub-$400 Kitchen Appliances This Week
EXCLUSIVE: Hoover to Move Extensive Range Of Appliances to New Distributor
Christmas Kitchen Sale Hits Aldi This Saturday