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Myer chief says 'shareholders deserve better' as company tumbles to $486 million loss

The Age logo The Age 11/09/2018 Patrick Hatch
Myer's sales and earnings have been falling in recent years. © Peter Rae Myer's sales and earnings have been falling in recent years.

Myer's new chief executive says "shareholders deserve better" as the department store unveiled a full-year loss of almost half a billion dollars, after it suffered a continued fall in sales and was forced to writedown the value of its assets.

The company on Wednesday reported a statutory net loss after tax of $486 million for the 2018 financial year, compared to an $11.9 million profit a year earlier.

The result was driven by significant costs of $541 million, including a $515 million write down to the value of Myer's goodwill and brand name.

On an underlying basis, stripping out write-downs,  restructuring and store exit costs, and onerous lease expenses, Myer's net profit fell 52 per cent from $68 million last year to $32.5 million.

That was slightly below market analysts' consensus forecast of $33 million.

“These results are obviously disappointing and shareholders deserve better," said chief executive John King, who took on the top job in June.

"Shareholders deserve better": Myer CEO John King. © Supplied "Shareholders deserve better": Myer CEO John King. Mr King said Myer had a plan to turn its fortunes around by putting customers "first in everything we do".

"We know our customers want high quality, on trend products, at the right price, supported by great customer service," he said.

Myer said that its bankers had agreed to give it more breathing room by agreeing to refinance $400 million of debt, pushing its due date out to February 2021.

The company’s debt covenants have also been relaxed, after it come in danger of breaching those conditions earlier this year.

Myer's chairman Garry Hounsell said the results were "disappointing", but said his board had acted decisively when it realised the business was not going improve earnings by firing former CEO Richard Umbers and bringing in Mr King and other new senior executives.

More to come 

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