Postie Plus [NZX: PPG], the worst performing stock on the New Zealand sharemarket the past year, had its shares placed on a trading halt pending a material announcement by the company.
The Auckland-based retailer has previously said it expects to have a “significant” net loss before tax in the year ending Aug. 3, though smaller than last year’s loss of $10.6 million. Postie Plus has struggled to deal with the poorly executed outsourcing of a purpose-built distribution centre in Mangere when it relocated to Auckland in 2012, where it saw greater opportunities. The disruption to its supply chain put the operation under pressure, leaving it with too much debt and limited cash flow.
Last month, Postie Plus said it was in breach of its lending covenants and expected to remain so “for the foreseeable future,” meaning its bank funding is repayable on demand. The funding remains available and the company was in regular contact with its bank, it said. The board was satisfied that the arrangements it had in place with its bank were sufficient to meet the company’s forecast funding requirements up to July 30, it said last month. The company is working on recapitalising its business ahead of a forecast funding requirement peak of about $19 million between July 30 and Feb. 2 next year.
Postie Plus said last month it expects to be able to negotiate new bank facilities for the period beyond July 30 “if the company is able to meet its trading forecasts and secure additional funding to reduce its reliance on bank funding".
The company's shares have plunged 59 percent over the past 12 months, making the stock the worst performer on the NZX All Ordinaries Index. They last traded at 7.3 cents, valuing the company at $2.9 million.