Outdoor, sportswear, and car parts group, Super Retail Group plans to raise $203 million to help grow its business as it emerges into a post-COVID-19 lockdown world.
Super Retail owns the Supercheap Auto, Rebel Sport, and BCF chains and brands.
The company revealed the issue yesterday in a trading update that confirmed the company had seen violent swings in sales in April and May.
The company saw a 26.2% decline in like-for-like sales in April, which was followed by a just as strong rebound in may sales of 26.5%. “Group sales have continued to benefit from the strong consumer environment in June,” the company said without giving any figures,
“During April and May, there was a strong shift to on-line with Group on-line sales increasing 126.2% vs. the previous corresponding period (pcp) to represent 18.2% of Group sales over the same period,” the company said in Monday’s statement.
The firm said group sales growth has continued to benefit from a strong consumer environment in June as coronavirus lockdowns continue to ease, led by the Supercheap Auto, Rebel, and BCF brands. Macpac was hurt by the NZ government-imposed lockdowns.
The shares went into a trading halt on Monday as it launched an underwritten 1 for 7 accelerated pro-rata non-renounceable entitlement offer to raise at a fixed price of $7.19 a share, a 7.9% discount on the last sale of $7.81 last Friday.
Approximately 28.2 million new fully paid ordinary shares in Super Retail Group will be issued under the Equity Raising, representing approximately 14.3% of existing shares on issue.
“The equity raising will enable Super Retail Group to continue to execute its strategy and pursue strategic growth initiatives, allowing the company to position the business to take advantage of changing consumer trends by returning capital expenditure to historic levels of $90m per annum, even if a softer trading environment emerges,” the company said in its statement on Monday.
The company said there would be $40 million in one-off costs in the June 2020 financial results, on top of the $18 million in one-off costs in the December half-year result.
As well there could be impairment write-downs as well, the company warned yesterday.
“In accordance with usual end of year practice, Super Retail Group is also undertaking a review of the carrying values of intangibles, which may result in additional non-cash write-downs,” directors said.
