BSL prepares for up to $2.3 million loss

By Matthew Henry

NEWCASTLE: Betta Stores Limited (BSL) today predicted it will post a loss of between $1.8 million and $2.3 million for the half year to 31 December 2005, but the embattled company has again delayed revealing its full financial results.

After being suspended from trading on the Newcastle Stock Exchange (NSX) earlier this month for not posting its results for the period on time, BSL today said in a company announcement that certain factors delaying the release of its official results have yet to be resolved.

According to BSL, the transition from auditor Grant Thornton to KPMG and the recent decision to appoint an external accounts expert to complete an internal review of the company’s accounting practices, will both further stall the announcement.

“After extensive deliberations, both the board and executive management consider prudent practice requires the withholding of the release of financial statements (audited or unaudited) until the accounting systems review has been completed. The incoming auditors, KPMG, endorse this position,” BSL said in its preliminary announcement to the NSX.

In a letter addressed to its shareholders, retailers and suppliers, BSL claimed the poor half yearly results outlined in its preliminary statement were caused by bad and doubtful debts of $1.3 million due to the general retail downturn and the collapse of BSL member Hi-Fi Supermarket, the write-off of goodwill of $0.9 million on the acquisition of retail chain Buy Rite Southern, and poor results from some subsidiary companies.

BSL predicts its net asset position will stand at between $9.5 million and $10 million in the final accounts.
The company also reported its franchised stores achieved ‘relatively strong performance’ over the period, reducing the severity of the loss.

“The directors and management are currently reviewing all aspects of the business with a view to refocusing the company on the core business of franchising and retail services. We are committed to keeping all stakeholders fully informed as we fulfil this strategy and return the company to a position of strong growth,” said the letter signed by BSL chairman of directors, Patrick Tynan, and CEO Guy Houghton.

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