Super Retail Group has announced a $203 million equity raising to fund sales growth and working capital amid the disruption caused by the coronavirus pandemic.
The Rebel Sport, Supercheap Auto, BCF and Macpac brand owner will issue one share for every seven held by existing shareholders, at $7.19 each, a nearly 8.0 per cent discount to Friday’s closing price.
It also said group sales rebounded strongly in May following a decline in April.
Like-for-like sales were up 26.5 per cent in May, compared with a year ago, after declining 26.2 per cent in April.
“We are very pleased with the robust trading performance of the Group despite COVID-19,” chief executive Anthony Heraghty said.
The company’s four core brands are “well positioned to take advantage of the shifts in consumer behaviour that have been observed through the pandemic”, Mr Heraghty said.
Online sales had grown from just more than 7.0 per cent of total sales in fiscal 2019 to 18.2 per cent of total sales in April and May, the company said.
Company founder and former chairman Reg Rowe, who owns a 30 per cent stake in the company, had expressed his support for the equity raising and committed to take up his full entitlement of $59.2 million in new shares, Super Retail Group said.
The equity raising would reduce the company’s net debt from $252 million in December 31 to $54 million and reduce its debt-to-earnings ratio from 0.8 to 0.2, the company said.
This would leave it with a strong balance sheet and Super Retail Group said it would consider paying a final dividend.