Specialty Fashion (SFH) shares fell 6% at one stage yesterday yesterday in spite of a solid rebound in profit because doubt has emerged over the $135 million takeover offer from a company associated with the Qatari Royal family.
The shares ended at 62.5 cents (down 2.4%) after the budget women’s wear clothing retailer reported a 37% jump in net profit to $12.1 million in the December-half after the troubled Rivers division finally broke even.
But it was the sudden doubt about the Al Alfia Holdings offer that grabbed investor attention.
The company is controlled by the Qatari royal family and made an indicative, non-binding offer for Specialty Fashion last month at 70¢ a share, valuing the company at $135 million.
But Specialty Fashion revealed in yesterday’s statement “Due to the unforeseen circumstances relating to the death of the father of the sole shareholder of Al Alfia, the funding has been temporarily restricted in probate.”
"Al Alfia has advised they are addressing the probate issue, however, it has not been able to confirm when this will be resolved."
When the probate issue is resolved and Al Alfia returns to the Board with a proposal capable of being put to shareholders, the board says it will assess it on its merits.
Specialty Fashion owns a string of retailers including Katies, Millers and Rivers. It said the group will continue to focus on the transformation of Rivers into a profitable business and on growing the group’s brands, including expansion of its City Chic brand in Australia.
Profit rose despite a 1% fall in revenue to $430 million for the six months to December 31.
Same-store sales fell 2%, while the group’s underlying earnings before interest, tax, depreciation and amortisation rose 12.7% to $30.4 million in the same period.
Chief executive Gary Perlstein said it was a hard fought result achieved during a difficult and volatile Christmas trading season.
"While sales revenues were slightly down, margin improved due to better markdown management and holding the overall cost of doing business flat," he said.
