Godfreys Group Limited announced its unaudited financial results for the six month period that ended 25 December 2015, and the outcomes were not good.
The company warned investors that its underlying net profit ‘would fall by up to 32.8 per cent to $4.3 million,’ reported the Sydney Morning Herald (SMH) on 13 January. ‘In the previous corresponding period, the underlying net profit was $6.4 million.’
‘Godfreys is also forecasting full year revenue of $181 to 185 million for 2015-16,’ continued SMH. ‘This compares with $182.6 million in 2014-15, which was a 5.2 per jump on the previous year.
‘Meanwhile, full-year net profit is expected to be $8.5 to 9.2 million, compared with $12.9 million in 2014-15.’
The SMH also reported that Godfreys’ shares plummeted as low as 30.8 per cent to $1.10 following the trading update, before closing at $1.14.
“Clearly this is a disappointing financial result,” said Godfreys’ chairman, Rod Walker, in the company’s press release.
Mr Walker attributed the profit plunge to “poor execution” from management and its “failure to adequately capitalise on the significant market shift” to stickvacs.
“While the market for stickvacs grew by more than 60 per cent, year on year, the late arrival of our product range meant the company was not positioned to capitalise on this major trend,” Mr Walker said.
As a result, Tom Krulis stepped down from his role as Godfreys’ chief executive on 13 January. Former Woolworths executive Kathy Cocovski will replace him as chief executive from 27 January. Ms Cocovski brings more than 30 years’ experience in the retail sector with organisations including Myer, Big W and Just Jeans.
However, Mr Walker said Mr Krulis will be retained as an executive director in charge of the company’s international operations.
“Fundamentally the Godfreys’ business is extremely robust and the board is confident that with new leadership and a refreshed approach, we can restore Godfreys’ financial performance and re-position the company for future growth,” said Mr Walker.