OrotonGroup (ORL) shares are expected to resume trading later today after the board provides the numbers of flesh out yesterday’s downgrade in five months.
Trading in the shares was halted before the session began as the company promised a fuller update yesterday.
The shares had closed at $1.35 on Friday – well under the $1.82 at the time of the earlier downgrade in January.
Directors told the ASX yesterday that preliminary figures for April, an important trading month for the group, indicated that earnings were below those in the previous corresponding period.
The company asked for trading in its shares to be halted until Wednesday or until it issued a trading update.
Analysts slashed their full year profit forecasts for OrotonGroup in March to just $1.5 million – compared with underlying net profit of $4.6 million in 2016 – following a worse than expected first-half result.
Group net profit for the six months ending January slumped 52% to $1.8 million following a 10% in sales to $67.1 million. Like-for-like sales at the Oroton brand fell 11% and like-for-like sales at Gap stores fell 12%. The disappointing first-half result saw managing director Mark Newman forced to resign in April after a backlash from minority institutional investors.
OrotonGroup will join a small but growing group of companies that have already issued double downgrades for the 2016-17 financial year. That group includes footwear retailer RCG Corp, bedding and homewares retailer Adairs, infant foods company Bellamy’s, Intueri Education, information group, iSentia, Mobile Embrace and OFX Group.
Macquarie Securities says that more than 70 companies have issued at least one profit downgrade so far in 2016-17 year.
