Godfreys shares have plunged 14 per cent after the vacuum cleaner retailer made a half year loss of $21.7 million and said difficult trading conditions are expected to continue.
Writedowns on the value of goodwill and the Wertheim brands, totalling $24 million, were the primary reason for the loss, though comparable store sales dropped seven per cent from a year earlier, hurt by the continued trend towards stick vacuums at lower prices and margins.
Revenue in the six months to December 31 rose 2.8 per cent, including a contribution from New Zealand commercial cleaning group The Service Company, which Godfreys bought in 2016.
Trading conditions are expected to remain difficult in the second half of the financial year, until the benefits of changes to the company’s product range, store presentation and staff training improve financial performance, Godfreys said.
Its shares dropped 15 cents, or 14.3 per cent, to a three month low of 90 cents.
It’s been a rough year for the vacuum specialist, which was fined $48,000 in the Manukau District Court after pleading guilty to 10 charges under the Fair Trading Act (FTA) relating to its extended warranty agreements and also had two CEOs resign within six months of each other.
