Clive Peeters Looking For Cash As Sales Slump And Profits Evaporate
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Shares in appliance and consumer electronics retailer, Clive Peeters, have fallen 34% today after the company reported a $4.5 million dollar loss with little hope of future profits from the company who last year got back over $16 million from their former payroll manager.

The company has also said that they are currently in talks with their bankers about future funding with analysts tipping that the company is set to struggle going forward as the market softens and demand for consumer electronics and appliances slow.

Currently, the former payroll master of Clive Peeters, Sonia Causer,  is facing theft charges in a Melbourne Court after an extensive investigation revealed that close to $20M dollars was stolen from the Company over a two year period. The theft went undetected by senior management.

In the three months January to March 2010, the company reported a loss of $4.5 million. This compares to a loss of $0.6 million for the same period in 2009.

The company is tipped to make a bigger loss in the last quarter of the 2009/2010 trading year after reporting that April sales have deteriorated.

In a report to the ASX, Clive Peeters said trading conditions at the beginning of H2 2010 for the big ticket discretionary retail sector were challenging and that the receding effect of the Federal Government stimulus packages had begun to affect consumer spending.

 

The board believes that the cumulative effect of five official interest rate rises in the last seven months appears to be having a significant effect on consumer spending.

Earlier today the Australian Reserve Bank increased interest rates a further 0.25% to 4.5%. This will put pressure on Clive Peeters borrowing, say analysts.

Greg Smith, Managing Director said “The combination of very subdued sales and margin pressures will materially impact the trading outlook of the company over H2 2010, despite the company’s successful cost reduction programme, which it implemented over FY 2009 and has maintained over FY 2010 to date.

The company is still hoping for some improvement in retail conditions over the months of May and June 2010, which are traditionally stronger months in the second half of the financial year. Also the major event of the World Cup football and the progressive release of a host of new home entertainment and technology products, including 3D and Internet TV, are expected to stimulate some sales growth over these two months, and hopefully beyond”.

Smith added “The reports of a strengthening housing market, an improving unemployment trend and forecast economic growth all provide some grounds for optimism”.