The Super Retail Group Ltd (ASX: SUL) share price won’t be going anywhere on Monday.
This morning the retail group requested a trading halt while it undertakes an equity raising.
What did Super Retail announce?
This morning Super Retail announced that it is launching an underwritten accelerated pro-rata non-renounceable entitlement offer to raise approximately $203 million at $7.19 per share. This represents an 8% discount to its last close price.
Management believes this equity raising will allow the company to continue to execute its strategy and pursue strategic growth initiatives.
It will also put Super Retail in a position to take advantage of changing consumer trends by returning capital expenditure to historic levels of ~$90 million per annum, even if a softer trading environment emerges.
This includes the company investing in its omni-retail digital customer experience and analytics, the supply chain to facilitate omni-channel sales growth, the further simplification of its business model, footprint optimisation and organic market consolidation, and increased supplier promotional activity.
Trading update.
Super Retail also provided the market with an update on its performance since the reopening of its stores.
Following a sharp decline in April, the company’s group sales rebounded strongly in May. Group like for like sales increased 26.5% in May compared to the prior corresponding period. As a comparison, group like for like sales fell 26.2% in April.
The Supercheap Auto and Rebel businesses have been doing the heavy lifting. Their sales are up 4.6% and 2.1%, respectively, for the 47 weeks to May 2020. This has offset 0.6% and 10% declines, respectively, in the sales of the BCF and Macpac businesses over the same period.
“Robust trading performance.”
Super Retail’s Chief Executive Officer and Managing Director, Anthony Heraghty, was pleased with the company’s performance during the pandemic.
He said: “We are very pleased with the robust trading performance of the Group despite COVID-19 and thank our team members for their dedication to the business during the pandemic. The execution of our strategy has continued during COVID-19, with our four core brands well positioned to take advantage of shifts in consumer behaviour that have been observed through the pandemic. The equity raising enables us to continue the execution of our strategy, further strengthen our omni-retail capabilities and continue to organically grow our four core brands.”
One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.
Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- These are the 10 most shorted ASX shares
- Cheap ASX 200 retail shares to buy today
- These are the 10 most shorted ASX shares
- Leading brokers name 3 ASX 200 shares to buy right now
- These are the 10 most shorted ASX shares
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Why the Super Retail share price is in a trading halt appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/2Y1bXLb
Leave a Reply