With a new owner and management team, ailing vacuum cleaner company Godfreys says it has cash flow problems.
In its statement to the market, Godfreys said the new chief executive officer and chief financial officer had been reviewing the company’s cash flow numbers.
“Preliminary indications are that the Godfreys business may, without further financial support experience cash flow challenges in early July 2018,” the company said.
It said it had been talking to its financiers about extending the limit on its $30 million loan and that the financiers had agreed but required a substantial repayment.
“The Godfreys Board is seeking advice about all the options available to the company, including a rights issue, and will update the market appropriately in due course,” Godfreys said.
Investors have also been warned of another profit downgrade with the company saying it was still reviewing the numbers and that forecast earnings might differ materially from previously published earnings guidance.
“In the meantime, it would be prudent for shareholders and investors not to rely on previously published earnings guidance,” Godfreys said.
Godfreys’ share price has fallen 90 per cent since it listed in 2014 at $2.75. Yesterday, it was trading at 33 cents.
Godfreys was taken over by 99-year-old major shareholder John Johnston, one of the founders of Godfreys in the 1930s.
Johnston, who turns 100 in July, had made an all-cash bid of 32 cents a share through his family-owned Arcade Finance.
He now owns more than 80 per cent of the shares in the company and has put in a new management team.
8th June 2018.