Where have you gone Justin Cameron? Our nation turns its lonely eyes to you!
Stab/Stitch was the hottest thing going just months ago. How could a company combining lit AF magazine Stab, ultra-winning fin company FCS, British wave forecasting website Magic Seaweed and online retailer Swell lose? It couldn’t!
But then it did.
This morning The Australian reported:
Shares in underperforming online surfwear and action sports retailer SurfStitch have been placed in a trading halt pending an update from the company on its expected earnings for fiscal 2016.
Investors are bracing for further possible bad news that could include its third profit warning this year.
SurfStitch said in a brief statement to the Australian Securities Exchange that it needed a trading halt on its shares until Thursday as it provided the market with a “further update on its anticipated pro-forma EBITDA for the year ending 30 June 2016’’.
In May SurfStitch shares plummeted 60 per cent after it issued its second profit warning this year, following the shock resignation of SurfStitch co-founder and chief executive Justin Cameron in March.
At the time SurfStitch chairman Howard McDonald said the CEO’s departure had left one of the businesses SurfStitch acquired “exposed’’.
Under Mr Cameron’s watch the company made a string of acquisitions, spending tens of millions of dollars, to grow its business in sports media and publishing and other related sports apparel ventures.
Mr Cameron left to team up with private equity to work on a potential takeover bid for the company, but so far no bid has been sent to the SurfStitch board.
The profit downgrade in May was triggered by a slowdown in the US surf and action sports apparel market, which had forced SurfStitch to engage in discounting, further eroding margins.
It was forced to scale back earnings guidance to $2 million-$3m in earnings before interest, tax, depreciation and amortisation for 2016 against an original forecast of EBITDA of $15m-$18m. SurfStitch booked pro-forma EBITDA of $7.7m in 2015.
SurfStitch shares last traded at 40.5 cents, against an IPO price of $1 when the company floated in late 2014.