SFH 1.24% $1.22 specialty fashion group limited

Nini B confirms interest - shaming SFH

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    Makes for incredible reading when you put this into context.  Noni B telling us that they are "taking advantage of its streamlined supply chain and efficient head office structure" in seeking to buy SFH or its brands.

    Code for: "we know how to run a business and SFH does not"

    How on earth did it come to this? Is SFH Board & management embarrassed to read this?

    Since Alceon bought into Noni B, its shares have risen four-fold.


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    the B Noni B chief Scott Evans has rewarded shareholders with a 9¢ a share dividend after delivering a fourfold increase in December-half profit. Louie Douvis
    by Sue Mitchell
    Womens wear retailer Noni B, which came close to collapse almost four years ago, has emerged as a potential buyer of struggling rival Specialty Fashion Group after a stunning turnaround under major shareholder Alceon Group.
    Noni B chairman and Alceon executive director Richard Facioni confirmed Noni B was interested in buying Specialty Fashion, or some of its brands, which include Katies, Millers, Crossroads, City Chic and Rivers.
    "We think this is not a bad time to be looking at acquisitions because the retail environment is depressed and a number of retailers are struggling," Mr Facioni told The Australian Financial Review after unveiling a bumper 9¢ a share interim dividend and a fourfold increase in December-half profits.
    "Specialty Fashion has made it public knowledge they are looking at their options. Would we look at that business? Yes we would, but only if the deal makes sense for our shareholders and is accretive.

    "They do have quite a mix [of brands] and some of them fit more neatly into our portfolio than others, but whether a transaction eventuates and what that would look like that's too early to say."

    NONI B FPO (NBL)

    $2.260.000.00%
    - ‎10‎:‎12‎:‎10‎ ‎AM
    View full quote
    Column 1 Column 2 Column 3
    0   28/2/18 Dividend/Distribution - NBL
    1   28/2/18 Noni B Half-Year Press Release
    2   28/2/18 Noni B Half Year-Appendix 4D
    3   9/1/18 NBL - 2018 H1 trading update
    4   20/12/17 ASIC Form 484 Share Cancellation
    View all announcements
    Alceon, which owns 40 per cent of Noni B,  sees scope to plug new clothing brands or businesses into Noni B, taking advantage of its streamlined supply chain and efficient head office structure.
    "With all those back-end efficiencies we've got, it becomes quite accretive for us and it make sense to look at another [acquisition] or a portfolio of brands to do that through Noni B," Mr Facioni said.
    While Specialty Fashion struggles to stay afloat and PAS Group's sales and earnings have gone backwards, Noni B went from strength in the December-half, buoyed by the acquisition of James Packer's Pretty Girl Fashion Group in 2016, strong online sales growth and new stores.
    Net profit rose more than four-fold to $11.8 million, compared with $2.5 million in the first half of 2017, and underlying earnings (EBITDA) rose 54.5 per cent to $22.1 million, slightly ahead of Noni B's January guidance.

    Sales rose 35 per cent to $193.2 million, with 28 new W-Lane and Beme stores augmenting same-store sales growth of 3 per cent and online sales growth of 68 per cent.
    Managing director Scott Evans said same-store sales had risen around 3 per cent in the two months ending February and the group was well placed for the June-half, although industry discounting was rife.
    Analysts are currently forecasting a full-year net profit of $16.7 million, compared with a bottom line net profit $3.2 million in 2017, or $8.9 million before one-off restructuring costs.
    Noni B declared an interim dividend of 9¢ a share, its first since 2014, when the company fell into the red and the founding Kindl family sold its controlling 42 per cent stake to Alceon for 51¢ a share.

    Since Alceon's takeover offer, Noni B shares have risen four-fold, rising another 6.5 per cent to $2.28 on Wednesday.
    Mr Facioni dismissed suggestions Alceon had bought Noni B on the cheap, saying the business was "tired" and "broken".
    "It was probably a few months away from declaring insolvency it was that bad," he said.
    "They hadn't moved with the times, they had a very inefficient sourcing model [using] third party wholesalers and agents, which added an extra layer of costs. When we took over we removed that layer of costs and improved profits quite materially within a few months.

    "Retail is a tough, tough business and if you take your eye off it for two minutes it can deteriorate. People do have a use-by date and retail businesses do need fresh investment in human capital every few years to reset and grow the business."
 
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