Godfreys has provided a trading update for the half year ended 29 December 2017, warning of an expected net loss of $59 million following weaker than expected Christmas sales.
In December the vacuum retailer reported like-for-like (LFL) sales during October and November 2017 were volatile and weaker than expected. This reversed what had been an improving trend in LFL sales through until the end of the September 2017 quarter.
Godfreys’ trading across the Christmas period was also weaker than expected. Unaudited LFL sales for the half year ended 29 December 2017 were 6.2 per cent lower than the prior corresponding period.
The retailer stated underlying weakness in LFL sales coupled with the planned reduction in franchise conversions has produced an unaudited underlying EBITDA result of $3.6 million. Underlying EBITDA reported in the prior corresponding period was $6.3 million.
Godreys expects to report a net loss after tax of around $59 million, if the if the non-cash impairment of goodwill and intangibles, which is expected to be $75 million before tax, is recognised in the financial report for the half.
In December Godfreys appointed Jason Gowie as managing director. Other management changes announced at the time included Brendan Fleiter as chairman, replacing outgoing chair Rod Walker.
Kathy Gramp and Penny Burke also joined the board as non-executive directors. Burke will also chair the newly formed Customer Committee for the board that will focus on improving the customer experience and channel development.
Gowie is set to release the company’s financial results and strategic update on 20 February 2018.