By Matthew Henry
BRISBANE: Betta Stores Limited (BSL) has finally released its half-yearly results for the six months to 31 December 2005 to the Newcastle Stock Exchange (NSX) after a five month delay, posting a net loss of $4.95 million after tax.
BSL released its full financial results for the period to the NSX this morning, and will likely have its trading halt reversed early next week, which was enforced by the NSX in late March when the retailer failed to post its half yearly results on time.
The reported loss more than doubles the figure predicted by BSL in its preliminary results released in March this year, when the company said it expected to be as much as $2.3 million in the red for the period.
Although BSL reported strong revenue of $192.8 million, up from $97.4 million in the previous corresponding period, the overall $4.95 million loss has been blamed on the poor performance of the group’s corporate retail business unit and central accounting business unit.
In the same period last year, the retailer posted a $0.8 million profit.
Company-owned stores burnt the biggest hole in BSL’s pocket, losing $5.6 million before interest and tax in what BSL chairman Patrick Tynan lamented as ‘below expectations’.
During the same period, the central accounting business contributed a $100,000 loss, despite helping boost revenue.
BSL today restated its intentions to roll back investment in its corporate retail stores and central accounting business unit, while placing greater emphasis on its franchise business, which when isolated contributed a $1.3 million profit.
“The process of rectifying these issues by the board and management of BSL is part of an ongoing restructuring program to once again refocus BSL on its core business of franchising. The process is almost complete,” said Tynan.
“Franchising is what we do best and has been our core business for 45 years. We are good at it, we have proven systems and brands and we are refocusing the entire business on it in line with our future vision and growth strategies for the company.”
BSL CEO, Guy Houghton, also reinforced the group’s plan to pursue a franchise model as its key platform for profitability and growth in the future – even at the expense of losing more retailers.
“Our ultimate goal is to be a highly focused franchisor with superior systems and brands that give us a competitive advantage in the marketplace,” said Houghton.
“We are committed to that ultimate goal and appreciate that to achieve the company’s objectives there may be some adjustments, including the loss of some retailers, in implementing the rigour required to support the ultimate goal.”
Although BSL would not predict when the NSX’s trading halt will be lifted, a letter from NSX general manager, Scott Evans, to BSL said the ban would cease within 30 minutes of receiving a cashflow statement, which is expected to be lodged next Monday.
BSL said it has amended accounting practices which contributed to the delay in posting its results, and expects to lodge its full year unaudited financial results for the 12 months to 30 June 2006 by 13 September, with audited results following by 30 September.