Online surfwear retailer Surfstitch (SRF) told the ASX yesterday that it had lifted its 2015 earnings guidance by 37% after forecasting higher-than-expected synergies from completing the integration of the Surfdome purchase from late last year, and the restructuring of its European operations.
But the news left investors underwhelmed, with the shares only managing a rise of 0.6%, or one cent, in the generally upbeat market.
That $1.65 level meant the shares regained the all time high they reached early last week.
SRF 1Y – SurfStitch ups earnings guidance
In the statement to the ASX, Surfstitch chief executive Justin Cameron said earnings before interest, tax depreciation and amortisation were expected to reach $7 million for the 12 months to June 2015 (excluding one-off costs associated with the company’s ASX listing) – its first profit in three years – compared with a prospectus forecast of $5.1 million.
The full year revenue forecast was unchanged at $199.1 million.
The trading update followed a 10% surge in Surfstitch’s share price last week, from $1.50 to a record high $1.65.
SurfStitch bought Surfdome, the largest online action sports retailer in Europe, from US-listed surfwear group Quiksilver for $45 million last November, a month before its $214 million listing on the ASX.
Surfstitch says it has now closed Surfdome’s warehouse and head office in France and integrated the operations into its existing businesses.
"The decision to consolidate the operations was a difficult but necessary one to honour our obligation to our customers, shareholders and business partners," Mr Cameron said.
