by Apparel Resources News-Desk
27-November-2018 | 2 mins read
South Africa-based furniture and apparel retailer Pepkor Holdings has announced that its full-year earnings are anticipated to drop down by more than 40 per cent. The company cited that new shares and a provision are the main reason behind the poor performance.
The announcement resulted in the company losing its share prices by over 11 per cent. The South African company marked out that its earnings per share would be primarily affected due to the dilution from the issuance of 882 million shares last year.
Reportedly, earlier this year, the retailer elucidated that the earnings would be hampered by US $ 36 million provision to cover a third-party debt acquired via using the company’s overseas shares as collateral.
Notably, an accounting scandal that appeared late last year caused the company a loss of more than 90 per cent of its total market value along with forcing it to sell the assets.
It is important to mention that the company in December had said it would exercise its call option consent with the Public Investment Corporation (PIC), Lancaster, Titan and Lavender Sky to get a 23.1 per cent economic interest in, and 50.6 per cent voting control of Shoprite.
However, the call options with two of the investors (Titan and Lavender Sky) were terminated and the board is eyeing to enter into talks with the remaining ones; the PIC and Lancaster.
Ryan Woods, a market trader at Independent Securities said that “If you look at what has come out, it’s not exactly extraordinary numbers. These things tend to get hammered on the basis of expectations.”
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