Rodney Orrock issues vaccine plea as Best & Less makes ASX debut

Best & Less CEO Rodney Orrock has called on all governments to ratchet up the Covid-19 vaccination campaign to restore confidence in the economy.

Best & Less chairman Jason Murray, left, with chief executive Rodney Orrock.

Best & Less chief executive Rodney Orrock has called on all governments to ratchet up the Covid-19 vaccination campaign to restore confidence in the economy and help the nation’s retail sector.

He also added his name to a growing list of executives calling fro a return of JobKeeper and other stimulus packages to battle the economic hardships caused by the protracted lockdowns.

Speaking after Best & Less made its $60m stockmarket debut, the newest CEO of a publicly listed retailer said he was looking for a faster vaccine rollout.

“My view on the vaccination rollout is they need to do a lot more, a lot faster,” Mr Orrock said as shares in Best & Less closed on Monday at $2.40, 24c above the IPO price. The debut gave it a market capitalisation of around $271m.

“It will provide significant confidence to the sector and to our consumers – our leaders (need) to focus on getting this bit absolutely right and getting it done as quickly as they possibly can.”

The first round of vaccines had proved a godsend for consumer confidence.

In May, well before the Delta strain of Covid swept through Australia, women’s fashion chain owner Noni B said the vaccination of older people was giving them the confidence to leave their homes and shop.

Mr Orrock said the return of stimulus measures such as JobKeeper was warranted. “What I support is in a time when there is an enormous amount of uncertainty that you put stimulus into the marketplace that enables businesses to plan with certainty,” he said.

“What happened last time when we went into these long lockdowns is there was certainty created as a consequence of that.

“It meant businesses could make decisions that weren’t going to harm the long-term prospects of the business.”

Best & Less received about $40m in wage subsidies.

Private equity firm Allegro Funds bought Best & Less along with Harris Scarfe in 2019.

Following the IPO it will collect about $90m after selling down its stake from 64.4 per cent to 43.5 per cent.
Retail entrepreneur Brett Blundy invested $40m for a 16.4 per cent stake in the retailer before the IPO.

Best & Less will now battle for shoppers in the general merchandise and discount department store space, competing with well-funded rivals such as Kmart and Target, owned by Wesfarmers, and Big W, owned by Woolworths.

And it all comes during the Covid-19 pandemic.

“We have been through many of these iterations in the past, and you become better from what you have learnt, from what you have done well and what you might have not done so well in the past,” Mr Orrock said.

“If this was the first time we have been in this situation I would probably be a lot more nervous than what I am. What we do know is that you really have to constrain your cost base at this particular point in time. What you do know is there is going to be a bounce back.

“You have to make sure you are planning and preparing for that appropriately and derisking the business as much as possible.”

In a trading update before its shares hit the market, Best & Less said it had delivered a strong fiscal 2021 trading performance, exceeding prospectus forecasts on all key metrics including revenue, gross profit, EBITDA and net profit.

“Despite ongoing disruption from Covid-19, Best & Less recorded strong like-for-like sales growth in fiscal 2021 and expects to achieve its calendar 2021 and first-half 2022 prospectus forecasts,” the company said.

Best & Less said despite a challenging start to the first half of 2022, it expected to achieve its prospectus EBITDA and net profit forecasts for calendar 2021 of $62.4m and $41.3m respectively, and $40.2m and $26.9m respectively for the first half of 2022.

For the year to June 27, Best & Less delivered unaudited revenue of $663.2m, exceeding the prospectus forecast by $5.5m. Like for like revenue growth of 10.8 per cent exceeded the target of 8.9 per cent growth.

Mr Orrock said Best & Less would invest in technology to improve its online offer and was aiming to add 25 stores to its 246 existing outlets across Australia and New Zealand over the next three years.