Myer in trading halt on ASX

Struggling department store Myer has felt the wrath of the ASX today after it ordered trading in the company’s shares be stopped. Here’s why and what it means for the retail giant.

Struggling department store Myer has felt the wrath of the Australian Securities Exchange today after it ordered trading in the company’s shares be stopped.

The ASX called a temporary trading halt this morning, despite a statement from Myer that it was not in breach of continuous disclosure rules.

The stoush between the retailer and the ASX stems from the publication of alleged updated quarterly trading and turnover figures for Myer.

The leaked statistics that were published in a Thursday financial newspaper indicated a drop in profit and turnover compared with Myer’s public forecast.

In a statement to shareholders titled “Response to AFR article”, Myer said it was not in breach of disclosure rules.

“The company is well aware of its continuous disclosure obligations and confirms it is in compliance with them,” Myer investor relations officer Davina Gunn said.

However, almost immediately after Myer lodged its statement, the ASX flexed its muscle and stopped trade in the retailers shares until further notice.

The Myer logo and clock are mounted on the side of the Bourke Street Mall, Myer department store in Melbourne. Picture: Carla Gottgens/Bloomberg News

“Trading in the securities of the entity will be temporarily paused pending a further announcement,” the ASX said.

The issue stems back to May when Myer told shareholders it would no longer publish quarterly updates to is trading and profit position.

Instead it would report every six months, as required by most listed companies.

However, the change of reporting and lack of information has fuelled speculation that the company is experiencing worsening trading conditions.

The share halt and uncertainty about Myer’s new disclosure regime comes less than two weeks before the company’s anticipated firey annual meeting on November 30.

Major Myer shareholder and former Myer chairman Solomon Lew has called for shareholders to vote on a spill of the Myer board at the annual meeting, as a protest against the department store’s under performance.

In its latest full year profit to July 2018, Myer reported a net loss of $486 million, compared with a $12 million profit in 2017.

However, after stripping out one-off costs the company reported an underlying net profit of $32.5 million, down 50 per cent compared with the previous year’s underlying profit.

The retail veteran has been a constant critic of Myer’s board since buying a stake long perceived as a foothold for a takeover.

Myer shares have fallen to 45 cents, from $1.19 the same time last year.

The Australian share market has closed marginally lower, with heavyweight healthcare and financial stocks unable to hold on to gains, and ended the week solidly in the red.

The benchmark S&P/ASX200 index was down 5.4 points, or 0.09 per cent, to 5,730.6 on Friday, while the All Ordinaries was 2.4 points at 5,822.8. Local shares started higher after overnight gains on Wall Street then lost steam around mid-day due to weakness in Asian markets.

ON THE ASX:

* The benchmark S&P/ASX200 index closed 5.4 points, or 0.09 per cent, lower at 5,730.6

* The All Ordinaries closed 2.4 points, or 0.04 per cent, lower at 5,822.8

* At 4.30pm AEDT, the SPI200 futures index was down 26 points at 5,687 points

CURRENCY SNAPSHOT AT 4.30pm AEDT:

One Australian dollar buys:

* 72.68 US cents, from 72.74 US cents on Thursday

* 82.39 Japanese yen, from 82.55

* 64.09 euro cents, from 64.18

* 56.81 British pence, from 55.91

* 106.40 NZ cents, from 106.97

GOLD:

The spot price of gold in Sydney at 4.30pm AEDT was $US1,215.01 per fine ounce, from $US1,211.50 on Wednesday.