This article is from the Australian Property Journal archive
SUPER Retail Group is hoping to capitalise on the goodwill of investors, announcing a $203 million capital raising on the same day it reported an uplift in sales despite the COVID-19 pandemic and bushfires, as well as a surge in online sales.
Following a 26.2% decline in like for like sales in April, trading across the group’s network of Super Cheap Auto, Rebel, BCF and MacPac stores rebounded with a 26.5% increase in May. It reported a total of 325 stores across Australia and New Zealand heading into the year.
During April and May, a strong shift to online shopping during the lockdown propelled online sales to 126.2% growth on the prior corresponding period, to represent 18.2% of total sales.
“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,” Anthony Heraghty, Super Retail Group chief executive officer and group managing director, said.
Sales growth in 2020 through to the end of May was driven by a 4.6% increase at Supercheap Auto, compared to the prior corresponding period, while fitness enthusiasts looking for their workout fix pushed Rebel sales up 2.1% as the lockdown closed gyms across Australia and NZ.
BCF sales slipped by 0.6% while Macpac, hit by the harsher NZ laws, was down 10.0%, but total growth came in at 1.9% to the positive.
“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,” Hereaghty said.
“Recent investments in the omni-retail platform and supply chain have enabled Super Retail Group to effectively meet a significant shift to on-line and click & collect purchasing. The group has also repurposed costs to areas of high activity to meet customer demand.”
The group announced an underwritten 1 for 7 accelerated pro rata non-renounceable entitlement offer to raise $203 million at a fixed price of $7.19 per share. The equity raising will comprise an institutional entitlement offer and a retail entitlement offer.
Super Retail Group is aiming “to take advantage of changing consumer trends by returning capital expenditure to historic levels of circa $90 million per annum, even if a softer trading environment emerges”.
About 28.2 million new fully paid ordinary shares in the group will be issues, representing approximately 14.3% of existing shares on issue, and issued at a fixed price of $7.19, at a 7.0% discount to the theoretical ex-rights price.
Major shareholder Reg Rowe has committed to take up his full entitlement via SCA FT Pty Ltd and SCCASP Holdings Pty Ltd, representing $59.2 million of new shares in the offer.
