Online surf retailer's stock hits record low…
What are your math skills like? Mine are crummier than yours, I’m guessing, but even these rheumy eyes can deduce that SurfStitch’s share price ain’t what it used to be.
Forty eight cents apiece just then after a second profit warning, down from over a buck a week or so ago and from a high of $2.09 in November last year.
This morning, The Australian newspaper reported,
“Shares in SurfStitch collapsed by more than 50 per cent this morning as investors fled from the online retailer after it issued its second profit warning this year. SurfStitch this morning had plummeted 52 cents, or 50.24 per cent, to a new record low of 51.5c on its shock profit warning as trading conditions across its key markets deteriorated.
“Pre-tax profits are now expected to slump by as much as 75 per cent in 2016.
“And the highly anticipated takeover bid from the former chief executive Mr Cameron, who quit suddenly to join forces with an unnamed private equity firm in March, is yet to materialise, with SurfStitch also announcing in a trading update that it had received to date no communication from its former boss or any private equity group.
“Meanwhile, the loss of the SurfStitch founder and a downturn in trading conditions will leave its mark on the online surfing and sports apparel retailer.
“The management turmoil at SurfStitch has impacted the company’s ability to implement its transformation program and integration of the companies acquired over the last 12 months, SurfStitch warned this morning, which combined has constricted the earnings benefits that were expected to be booked in the second half from its acquisition spree.
“SurfStitch co-founder and joint chief executive Lex Pederson said testing of the businesses it had scooped up in the last year had revealed the integration of the businesses had not been as fast as first hoped, with a downturn in trading also to hit the bottom line.
“These businesses present exciting content and advertising opportunities which will underpin our long term competitive advantage, but the benefits will not flow through into our results until 2017 and beyond,’’ Mr Pederson said.
“The scaled back earnings guidance of $2m to $3m is against an original forecast of EBITDA of between $15m and $18m.”
Is SurfStitch, the online retailer that owns FCS, Swell, Magicseaweed and Stab, a bargain at a little under fifty cents or is 15 cents the likely figure when recently departed co-founder Justin Cameron will step back into the game and buy back the company?
Further reading: Blood Feud! SurfStitch vs SurfStitch!