Enero shares drop as BMF and Naked struggle
Shares in Enero – the parent company of agencies including BMF and Naked Communications – today regained some ground after yesterday recording an 11% fall on the back of poor trading figures.
Yesterday’s update to the ASX saw shares fall from 44c to 39c, but they today recovered to 42c.
The announcement revealed that operating profits for the company in the first four months of the financial year were less than half the same period last year, based on a comparison to the companies remaining within the business. The fall in operating EBITDA (earnings before interest, taxation, depreciation and amortisation) was from $3.8m to $1.7m on a like-for-like basis. These numbers excluded companies that contributed profits last year but have since been sold or closed – including those saw a fall in profit from $9.9m to $1.8m.
According to the update, the fall came in part because of BMF’s loss of Commonwealth Bank as a retained client. It also said that Naked had been “impacted by difficult trading conditions in Europe”.
“The company has an excess cash balance of $7.5m “for investment purposes” ”
I think it’s a fair bet that’s the same $7.5M that the owners of BWM paid to buy their agency back.
The cash balance at the end of October was $21m. The $7.5m is excess over normal requirements.
It’s painful watching this slow death. No one can save a floored business model like this. Pack up,boys and head home. It’s over.
How much does Reg Grundy own these days?
I wonder if he still talks to Tim Hughes?