Allensford pressures The Reject Shop for sales performance
Allensford has once again called on The Reject Shop board to declare the business’s sales performance over the holiday period to shareholders, after the discount department store’s announcement revealed an isolated NPAT figure with no context.
The company, which has made a takeover bid for the TRS business, said in a release to shareholders that both sales figures and costs are fundamental indicators of the health of a business, hoping to see the composition of the projected NPAT.
“Trading sales performance over the half year is critical information to allow TRS shareholders to make an informed decision regarding the opportunity to sell their shares,” Allensford director Nick Perkins said.
“The market has often heard soft sales commentary from retailers, retail analysts and industry organisations following the critical Christmas trading period, but TRS shareholders have not yet seen a sales update. In the context of yesterday’s profit update, the absence of a sales update is significant and of concern for shareholders.”
Allensford also asked TRS board what its expectations regarding sales performance for the second half of the year, during which the retailer traditionally trades at a loss, and if it is expecting to make any asset impairments.
The $78 million takeover offer, made after TRS slashed its half yearly profit guidance by approximately 40 per cent, was extended by Allensford to expire on the 6 February 2019.
The TRS board has continued to fight against the takeover bid, recommending shareholders reject the proposal, which they have stated undervalues the company’s shares and fails to account for future growth plans.
“Amid a backdrop of highs and lows over the past few years, your Board continues to believe in the long-term growth prospects of the business, which has remained profitable despite the extremely challenging and fluctuating retail environment,” TRS chairman Bill Stevens said.
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