SCY Chart

[percy]

Why do you say the exit door is closing Percy? Is it due to the stagnant share price that is sitting at a record low or have I missed something else?

The share price has been in a free-fall for the past year.Each announcement is more bad news. Share price well below both 90 day and 180 day moving average.
Buyers have all but disappeared/.Today only 41,271 shares wanted from 39 cents to 32cents.Anyone selling 50,000 shares would find the exit closed.

[winner69]

The share price has been in a free-fall for the past year.Share price well below both 90 day and 180 day moving average.
Buyers have all but disappeared/.Today only 41,271 shares wanted from 39 cents to 32cents.Anyone selling 50,000 shares would find the exit closed.

Is Sir Ron still involved?

[percy]

Is Sir Ron still involved?

Yes and a mate.
I can not see where there is value,ie nta is shown at 65.48 cents.
However, a non profitable retailer with on going staff and lease commitments is worthless.
Maybe some value in their finance company,however with out their retail side providing customers I see little value there either.
No property left,all been sold.

[winner69]

Wonder if they will ‘tactically buyback’ some of their shares now there some ‘short term distortion’ in the share price

Canned the return of capital thing a while ago ......what Ron saw probably no longer exists.

[percy]

Wonder if they will ‘tactically buyback’ some of their shares now there some ‘short term distortion’ in the share price

Canned the return of capital thing a while ago ......what Ron saw probably no longer exists.

Share buyback would give them a bigger slice of a very small cake.More of nothing, is not a great strategy.{lease liabilties continue to the end of the lease,so who would want a greater liability?]
AgreedDid it with BIL,IEL and others.

[percy]

Today's commitment to a living wage is bold.
With a staff of 591 it could be called very bold.
I hope it is not the final nail in their coffin.

[Stranger_Danger]

I certainly don't see shareholders getting a "living return" any time soon.

[winner69]

Today's commitment to a living wage is bold.
With a staff of 591 it could be called very bold.
I hope it is not the final nail in their coffin.

'Not material' they say

But then in SCY case some would say $1 is material

[dubya]

Jeez I'm soooo glad to be out of this company. Thanks Percy :)
In the 2½ years I had them I just managed (with dividends included) to break even on exit.
Share price now seems to be in semi free fall. Down another 20% in the last few weeks. Retail sure is a tough business!!

[percy]

Saddens me watching their demise.
Staff give good honest advice.
Good quality products at fair prices.
Just not enough.
Would love to see them do well,but I just can not see it.

[dubya]

You wrote this 9 months ago:


If you care to read the out look statement, in every SCY annual report since 1991,26 years, you will note they have been cautiously optimistic.
We must keep in mind the share price of SCY and EBO, were very close in, I think, 1995.
So 10,000 SCY then had market value of $5,900.Same today,
while 10,000 EBO is worth $183,000 today.

Now that must focus any long term SCY shareholder's attention.

Tended to focus mine lol. And what you said to me at one of the CHCH meetings too.
I don't follow EBO but the difference would now be even greater.

Yes it is a shame, and I think they will just continue to meander along as a company with the finance side of the business propping up the rest.
I rarely go into Smith's City, but when I do (especially the Colombo Street store) there just never seems to be many customers there, but always lots of staff. Whereas places like Harvey Norman are always busy and the stores seen much more vibrant.

[winner69]

Percy ...you Mr Kerr ...or did you just tell him all this and that he had to get the house in order


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/323412/286152.pdf

[winner69]

Steve’s more of an IT guy but he’s probably right.

SCY will never be cheap as

For education purposes always worth watch train wrecks .... even if it’s only to recognise the next one when it comes along

Steve Biddle (@stevebiddle)
5/09/18, 4:38 PM
Smiths City will be like Dick Smith by early 2019. History. Can't turn around a failing business that doesn't even know what it wants to be or who it's target customers are. stuff.co.nz/business/10682…

[percy]

Percy ...you Mr Kerr ...or did you just tell him all this and that he had to get the house in order


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/323412/286152.pdf

I note he refers to his experience with Paper Plus.
They struggle too.
No magic there either.

[winner69]

I note he refers to his experience with Paper Plus.
They struggle too.
No magic there either.

I was being nice and didn’t mention that connection. The MTC chart doesn’t look too flash either.

Wonder what brings these execs to NZ .....Warehouse etc.

At least most of what he said was true

[percy]

Yes the English execs have a poor record here and in Australia .Great at talking the talk,but can not walk the walk.
The South Africans are performers.
Store staff engaging the customer is difficult, when the customer does not come into the store.

Looking for a bar fridge for over Xmas.
Google. Leemings ………….45 litre...$249 and $269.
…………..Mitre 10...…….....112litre.$299.
…………..Harvey Norman...115 litre.$295...50 litre.$249.
…………..Smiths City...…...Haier 50 litre.$349...75 litre.$319
…………...Warehouse...…….Daewoo.140 litre.$239.
Yes you have guessed right.Looks as though Warehouse will be engaging me as a customer.

[percy]

Percy ...you Mr Kerr ...or did you just tell him all this and that he had to get the house in order


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/323412/286152.pdf

Loved his comments about out of date IT systems.
Previous Chairman Craig Boyce, would love that,considering he is and has been chairman of Datacom for some years.

[percy]

The battle continues and does not get any easier.

[blackcap]

The battle continues and does not get any easier.

I see your morbid fascination with this stock continues :). I had a good read of the announcement and a glance at the financials. Was initially tempted to get in at 27.5 (I exited a while back in the 60's and high 50's) but after glancing the financial realised I have plenty of time to get back in if I want to and may not need to at all.

[percy]

The battle continues and does not get any easier.
Posted 20-12-2018.
The battle has got a lot harder.
6 months to 31st October.2019.
Revenue down 16.8% to $95,050,000
Loss $2,161,000.

[Gerald]

Posted 20-12-2018.
The battle has got a lot harder.
6 months to 31st October.2019.
Revenue down 16.8% to $95,050,000
Loss $2,161,000.

Hi Percy. Probably a stupid question but i'll try anyway.

As of 1st July 2019 SCY had a tangible asset backing of .77 per share, and is currently trading for .25 per share. The top 3 shareholders own a controlling stake in the company, so what is stopping them buying up another 25% if the sp continues downhill (or talking to minor shareholders) and liquidating the company for an approximate 300% return (which they have no chance of getting if they continue to hold)?

[blackcap]

Hi Percy. Probably a stupid question but i'll try anyway.

As of 1st July 2019 SCY had a tangible asset backing of .77 per share, and is currently trading for .25 per share. The top 3 shareholders own a controlling stake in the company, so what is stopping them buying up another 25% if the sp continues downhill (or talking to minor shareholders) and liquidating the company for an approximate 300% return (which they have no chance of getting if they continue to hold)?

What is that asset backing of 77c per share made up of? Is it realisable? How many long term leases do they have and how onerous would it be to exit them?

[percy]

What is that asset backing of 77c per share made up of? Is it realisable? How many long term leases do they have and how onerous would it be to exit them?


Now down to 67 cents.I very much doubt there is any realisable value.Value has been in Smiths Finance.However it relies on retail to originate deals.Without retail they have no originators.Smiths no longer own the Colombo Street store property.
Gerald .Welcome to sharetrader.

[winner69]

Hey percy ...hope history not repeating itself

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/350819/319821.pdf

[Biscuit]

Hey percy ...hope history not repeating itself

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/350819/319821.pdf

I'd say they are toast.

[percy]

Hey percy ...hope history not repeating itself

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/350819/319821.pdf

I fear it is.

[percy]

Maybe had SCY followed Gerry Harvey's "franchise" model, 20 years ago, they would be "well positioned" for anything today.
Certainly shareholders would have benefitted.

Above posted 22-12-2017.

[dameofdiv]

Someone on reddit shared that the CEO sent a thank you email to employees today for their "resilience and continuing loyalty" and that he can't tell them more about the ASB discussion until the shareholders are informed. :ohmy:

[winner69]

Good ol Smith’s City

Putting up a good fight for survival and refusing to put up the white flag

https://quoteapi.com/resources/da9866271f9d0071/announcements/scy.nzx/350885/SCY_Smiths_City_Strategic_Review_Covid-19.pdf

PS: NTA is 77 cents I believe so no worries but ... the company recognises the current capital structure is not sustainable given the outlook

[Balance]

Good ol Smith’s City

Putting up a good fight for survival and refusing to put up the white flag

https://quoteapi.com/resources/da9866271f9d0071/announcements/scy.nzx/350885/SCY_Smiths_City_Strategic_Review_Covid-19.pdf

PS: NTA is 77 cents I believe so no worries but ... the company recognises the current capital structure is not sustainable given the outlook

Strong loyal customer base in the South Island, I believe?

Expansion in recent years has obviously not worked for them so back to basics. Scale back to their loyal base and they should survive.

Only time I ever bought something from them was Boxing Day 2019 - and will never again! The customer service and follow up were abysmal.

They advertised they would beat anyone else for price or match them. Well, so happened I wanted a new wall oven and rangehood which they had in stock, and other outlets had sold out that day. I pointed out that their oven was $150 more expensive than Noel Leeming - which they checked and confirmed as correct.

But no, they will not match as they had the item in stock and the others do not! WTF! So I told them to forget it. Ordered from Noel Leeming instead.

Gets worse, believe it or not!

I ordered the rangehood as their price was same as other outlets and they had stock in another branch. Pick up in 2 days, they said.

Well, I went to pick up 2 days later and get this, after mucking around trying to locate my order, they found that they had ordered the wrong item from the other SCY store! So it had to be another 2 days.

Meanwhile, Noel Leeming has delivered the rangehood that very same day.

If I had SCY shares, I certainly would have sold them after that most unsatisfying shopping experience with them.

[percy]

Good ol Smith’s City

Putting up a good fight for survival and refusing to put up the white flag

https://quoteapi.com/resources/da9866271f9d0071/announcements/scy.nzx/350885/SCY_Smiths_City_Strategic_Review_Covid-19.pdf

PS: NTA is 77 cents I believe so no worries but ... the company recognises the current capital structure is not sustainable given the outlook

NTA at 77 cents,????????????????????????????.What tangible assets???????????? Stock at firesale prices.????????????
The current capital structure is not sustainable given the outlook.Agreed.
The BUSINESS MODEL is not sustainable either.
Pigs could fly before Landlords will agree to rent relief.They will only focus their attention when talking to receivers.

[winner69]

They still putting up a good fight percy

Talk of strategic investors - that doesn’t sound like good news for existing shareholders does it.

Hope nobody has been seduced by the 77 cents NTA

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/352684/322004.pdf

[percy]

They still putting up a good fight percy

Talk of strategic investors - that doesn’t sound like good news for existing shareholders does it.

Hope nobody has been seduced by the 77 cents NTA

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/352684/322004.pdf

I am sorry to say I do not think "talking to landlords" will be constructive,particularly when taking of store closures.Staff have never been "over paid",so little, or no savings there,as each store already has few staff..A good number of years ago I did suggest they put in cafes in their larger stores,but that idea was dismissed.I also felt they should have "franchised" their operations ie like Harvey Norman,but that also was very much against directors/management's vision.
Landlords only focus their attention talking to receivers or liquidators.
In my opinion the business model is past its best by date.
Going forward their finance company does not have a future,as they have relied on Smiths retail for clients.
There was an old saying in retail "your business is only as good as your lease".
I doubt there are few retailers today with good leases.

[winner69]

I am sorry to say I do not think "talking to landlords" will be constructive,particularly when taking of store closures.Staff have never been "over paid",so little, or no savings there,as each store already has few staff..A good number of years ago I did suggest they put in cafes in their larger stores,but that idea was dismissed.I also felt they should have "franchised" their operations ie like Harvey Norman,but that also was very much against directors/management's vision.
Landlords only focus their attention talking to receivers or liquidators.
In my opinion the business model is past its best by date.
Going forward their finance company does not have a future,as they have relied on Smiths retail for clients.
There was an old saying in retail "your business is only as good as your lease".
I doubt there are few retailers today with good leases.

Like that ‘your business is only as good as your lease’

Goes well with ‘your business is only as good as your worst employee’

Seems SCY doomed ...even a decent receiver would probably just close the doors for good.

[nztx]

Any guesses on what could follow out of this -

https://www.nzx.com/announcements/352684

"Smiths City restructuring process to begin"


Cropping some stores & staff seems to be being hinted at
Perhaps a Cap Raise of sorts -- but then the SP is well south of the equator
Perhaps hock off all or part of the Finance Division ?

[winner69]

Any guesses on what could follow out of this -

https://www.nzx.com/announcements/352684

"Smiths City restructuring process to begin"


Cropping some stores & staff seems to be being hinted at
Perhaps a Cap Raise of sorts -- but then the SP is well south of the equator
Perhaps hock off all or part of the Finance Division ?

Confirmation they’re munted

Survival getting rid of useless bits and these new investors essentially privatising the company

Existing shareholders - I’m afraid the shares are worth stuff all.

[nztx]

Confirmation they’re munted

Survival getting rid of useless bits and these new investors essentially privatising the company

Existing shareholders - I’m afraid the shares are worth stuff all.


You may well be right there too

BIL Australia's close mates at the Sydney HQ money pit may be a bit gutted with this sort of outcome

[Sideshow Bob]

Confirmation they’re munted

Survival getting rid of useless bits and these new investors essentially privatising the company

Existing shareholders - I’m afraid the shares are worth stuff all.

Speaking of munted, we bought some outdoor furniture from Smiths City that was munted in less than a year.

Good to deal with.....could get a refund, or hold a credit and wait until new season stuff comes in.

No surprises, we took the refund......otherwise we would have been the ones that were munted.

PS - munted is a such great word! :p

[nztx]

As a restructuring etc etc seems to be the prescribed SCY mode forward, it seems like the major SCY shareholders & their mates may have been a collective 'No want to know' .. but not surprising - as they probably haven't seen sniff of dividend recently, while all things SP continued sliding southwards ..

[Grumble]

Speaking of munted, we bought some outdoor furniture from Smiths City that was munted in less than a year.

Good to deal with.....could get a refund, or hold a credit and wait until new season stuff comes in.

No surprises, we took the refund......otherwise we would have been the ones that were munted.

PS - munted is a such great word! :p


Good to know the refund process is solid. Went to buy a phone a few days ago after being shown on the website that there were 4 in stock. Wanted to get hold of customer service before purchasing to confirm the location, but waited 90 mins with no answer. You don't get to see where the stock is located on the website, a bit strange. Ended up just buying anyway online. No indication of when it would be ready so have to go down to a physical store to ask.

Turned out they were all display models, luckily one was in Auckland. But THEN, turns out that model was a demo and unable to be sold. Had to can it and get a refund.

Contrast to Noel Leeming yesterday -- phone picked up immediately. She checks the stock availability to be super sure. Hop straight into car and it's in my hand as I arrive 20 mins later. Hmm...

I've heard of another mate have a similar experience with SCY. I would expect they have lost a few Level 3 sales as the online process seems a bit unco-ordinated.

[winner69]

Marlborough rate payers might have a big empty building soon ....or heavily subsidising a distressed tenant

https://www.stuff.co.nz/national/politics/local-democracy-reporting/300007469/fate-of-blenheim-smiths-city-uncertain

[Arthur]

Management is failing this company. I have been trying to buy goods from them, but website is inadequate the wait time to answer the phone is over an hour at times. Apparently they only have five people answering emails. They are swamped with people trying to buy, but have not employed enough people to answer the phones or emails. A tinpot takeaway can organise a click and collect and are open for business. This large retailer is obstructionist in almost every way. From what I have heard staff at click and collect are only working a few days a week in many stores, if at all. Staff have been told there are job losses coming, yet tens of millions of dollars of orders are going to waste due to inadequate staffing. If you are "lucky" enough to give them your retail dollar good luck collecting it, even if it is your local store.

[nztx]

Management is failing this company. I have been trying to buy goods from them, but website is inadequate the wait time to answer the phone is over an hour at times. Apparently they only have five people answering emails. They are swamped with people trying to buy, but have not employed enough people to answer the phones or emails. A tinpot takeaway can organise a click and collect and are open for business. This large retailer is obstructionist in almost every way. From what I have heard staff at click and collect are only working a few days a week in many stores, if at all. Staff have been told there are job losses coming, yet tens of millions of dollars of orders are going to waste due to inadequate staffing. If you are "lucky" enough to give them your retail dollar good luck collecting it, even if it is your local store.


They need only look at their Logo - that should give them an indication of where they're going wrong

If they have problems making things go well easier (as the track record suggests is the case), then Management & Directors should step aside to allow new more energised blood to do what they have failed to..

The current mob staying stuck to their seats will probably (on recent year's performances) only dig the hole bigger & likely in the process put the whole shooting box into Receivership or worse. Furniture & Appliances is a competitive game & requires talented achievers who can & will perform, not an entrenched bunch of bods who can't recognise potential grief & disaster sneaking around the corner, whether brought on them by their own making or otherwise..


It looks like the Sydneysiders are steering a wide berth

Why did this one attract Brierley's interest - any guesses ?

[percy]

The current mob not many years ago replaced long serving Chairman Craig Boyce,director John Dobson and CEO Rick Hellings.
I expect they were Brierley and Co appointments.
Brierley has at times seen hidden value in companies.Was often right but destroyed BIL,IEL and others when he was wrong.

[CD_CHCH]

Smiths City names 'turnaround specialist' Roy Campbell as CEO - April 2015

https://www.nbr.co.nz/article/smiths-city-names-turnaround-specialist-roy-campbell-ceo-bd-171399

[nztx]

Trading Halt @ 1.22 pm today

https://www.nzx.com/announcements/353206

The trading halt has been put in place pending the release of an announcement by the company

[winner69]

Trading Halt @ 1.22 pm today

https://www.nzx.com/announcements/353206

The trading halt has been put in place pending the release of an announcement by the company

And it’s not even 5 o’clock on Friday

[percy]

While the sale gives the Smiths City business a strong foundation on which to build, Directors believe Smiths City’s ordinary shares will retain no value following the sale.

[winner69]

Sold ..or given away

No value remaining for shareholders ...warned of that a while ago

Never never fall in love with a share trading at a big discount to NTA ...wasn’t Smiths reported NTA 77 cents. Hope none of you were tempted ...PERCY and me tried to warn you off.


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/353225/322677.pdf

[winner69]

While the sale gives the Smiths City business a strong foundation on which to build, Directors believe Smiths City’s ordinary shares will retain no value following the sale.

Hope Big Chill man makes a go of the remains

Methinks he’ll need a lot of luck

But Smiths City survives eh PERCY

[JohnnyTheHorse]

Sold ..or given away

No value remaining for shareholders ...warned of that a while ago

Never never fall in love with a share trading at a big discount to NTA ...wasn’t Smiths reported NTA 77 cents. Hope none of you were tempted ...PERCY and me tried to warn you off.


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/353225/322677.pdf

Most people keeping their jobs so a very good outcome.

I hope you haven't fallen in love with MET and are just hanging in there for the 6 bucks... or was that 7 bucks now?

[winner69]

Polar Capital’s Colin Neal said: “Smiths City has been part of the New Zealand retail landscape for more than 100 years. It is a trusted brand that has been synonymous with providing great quality, excellent value and attentive no-nonsense service.”

[Raz]

Polar Capital’s Colin Neal said: “Smiths City has been part of the New Zealand retail landscape for more than 100 years. It is a trusted brand that has been synonymous with providing great quality, excellent value and attentive no-nonsense service.”

Why buy it, can't see the value.

[winner69]

Why buy it, can't see the value.

Some might say Freightways gave them too too much for Big Chill ...ands theyve got to spend it somewhere

But good on them anyway

[Southern Lad]

I am surprised this is not a major transaction in terms of section 129 of the Companies Act 1993 requiring shareholder approval by 75% majority.

If it isn’t due to some technicality, the legislation needs beefing up.

[percy]

Hope Big Chill man makes a go of the remains

Methinks he’ll need a lot of luck

But Smiths City survives eh PERCY

Colin Neal's portfolio is not what I would call blue chip.Would certainly give me the "BIG CHILL".Hope springs eternal.?
Mercer Group,Moa Group and now Smiths City.

[CD_CHCH]

Sold ..or given away

No value remaining for shareholders ...warned of that a while ago

Never never fall in love with a share trading at a big discount to NTA ...wasn’t Smiths reported NTA 77 cents. Hope none of you were tempted ...PERCY and me tried to warn you off.


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/353225/322677.pdf


The transaction values the assets to be transferred to Polar Capital at around $60 million, however
with the purchaser assuming some debt and other liabilities, the net amount expected to be received
is $8 million.

Would this not equate to 15 cents per share? Roughly the amount they are/were trading at...

[Ogg]

I am surprised this is not a major transaction in terms of section 129 of the Companies Act 1993 requiring shareholder approval by 75% majority.

If it isn’t due to some technicality, the legislation needs beefing up.

Agreed. Let her burn I say.

[winner69]

Most people keeping their jobs so a very good outcome.

I hope you haven't fallen in love with MET and are just hanging in there for the 6 bucks... or was that 7 bucks now?

No Johnny ...just punting with MET. Heads you win tail you don’t lose they say.

In tandem with NTA suppose you’ve got to consider Net Realisable Value. Is the paper value worth thst in a fire sale?

Always dodgy with Smiths but with MET it’s real property and even in a ‘fire sale’ they’d get real cash.

[Ogg]

I am surprised this is not a major transaction in terms of section 129 of the Companies Act 1993 requiring shareholder approval by 75% majority.

If it isn’t due to some technicality, the legislation needs beefing up.

I think it went into liquidation first. That's the technicality.

[percy]

The transaction values the assets to be transferred to Polar Capital at around $60 million, however
with the purchaser assuming some debt and other liabilities, the net amount expected to be received
is $8 million.

Would this not equate to 15 cents per share? Roughly the amount they are/were trading at...

A guess.
Neal is buying assets and some debt.
Some lease liabilities will remain SCY's.

[Southern Lad]

Would this not equate to 15 cents per share? Roughly the amount they are/were trading at...

SCY presumably needs to fund the closure of the 7 stores not sold (including lease exits and redundancies) out of what’s left.

[winner69]

The transaction values the assets to be transferred to Polar Capital at around $60 million, however
with the purchaser assuming some debt and other liabilities, the net amount expected to be received
is $8 million.

Would this not equate to 15 cents per share? Roughly the amount they are/were trading at...

That would be soon gone getting out of the remaining leases, redundancies and paying the bills etc ...and Pwc Bill off course.

[Ogg]

The announcement on the 6th May leading up to this should have been clearer that there was a material uncertainty of the value of the shares. It reads like they were baiting shareholders on false hopes of a good outcome.

Stab in the back for sure.

[CD_CHCH]

I think it went into liquidation first. That's the technicality.

Should a liquidation or receivership not have been disclosed to the market prior to directors negotiating a sale of the business or assets?

[blackcap]

Should a liquidation or receivership not have been disclosed to the market prior to directors negotiating a sale of the business or assets?

Does such a large sale of assets etc not require shareholder approval under the Companies Act/NZX requriements and all that? Or are we now living in lawless times? IF I were a shareholder (thankfully I got out at about 40 odd cents) I would rather liquidation and get say 10% of the 77 cents NTA than nothing....

[Ogg]

News article now saying it didn't go into receivership. So yes, this deal would need shareholder approval.

[Southern Lad]

Should a liquidation or receivership not have been disclosed to the market prior to directors negotiating a sale of the business or assets?

There is nothing registered with the Companies Office to suggest the appointment of either liquidators or receivers, although I assume there is a time period allowed to register.

Doesn’t liquidation generally require a shareholder special resolution? A receiver would be appointed by ASB or some other financier with the power to do so.

However, the sale looks like it was agreed to by the directors so assume they need to follow due process.

[dubya]

https://www.nzx.com/announcements/353414

It does require shareholder approval. Going to be interesting to see how this pans out.
I wonder if the trading suspension will be lifted?

Got out about 18 months ago :)(thanks Percy )

[Southern Lad]

Today’s announcement is a big change from Monday’s announcement where directors expected the sale to Polar Capital to settle this Friday, 22 May. Assume if SCY shareholder approval is required that settlement won’t be happening for at least three weeks. The effective date (I.e. the benefit or detriment of trading) could still be an earlier date, subject to the sale being confirmed.

I’m assuming given major shareholders are unwilling to put in more cash, shareholder approval is a given.

[CD_CHCH]

The directors have stated "While the sale gives the Smiths City business a strong foundation on which to build, Directors believe Smiths City’s ordinary shares will retain no value following the sale."

Perhaps shareholders would be better off voting against the sale and taking their chances at recovering some of the NTA value as a vote for the sale seems to be a vote for a guaranteed loss meaning no upside for shareholders.

[winner69]

The directors have stated "While the sale gives the Smiths City business a strong foundation on which to build, Directors believe Smiths City’s ordinary shares will retain no value following the sale."

Perhaps shareholders would be better off voting against the sale and taking their chances at recovering some of the NTA value as a vote for the sale seems to be a vote for a guaranteed loss meaning no upside for shareholders.

Probably nothing left for shareholders whatever happens ....a NO vote = receivership

[Ogg]

Best option would be to vote no.

Very likely a counter offer or new bidder emerges.

Deal looked rushed.

Timing of takeover seems opportunistic.

No mention of independent evaluation report, this should be conditional.

Why is trading suspended? Market is clearly informed of situation.

[winner69]

Directors desperate to salvage something from thr train wreck

Don’t have much of a story to sell to shareholders this ‘sale’ a good idea do they

Losses mounting day by day

Receivership / administration any day now

Only thing they’ve got right is nothing left for shareholders

[nztx]

Agree with both of you - Ogg & Winner

A No Vote may well force the buyer to either negotiate with Liquidator / Receiver or make a takeover offer

The Board have screwed over shareholders IMO and should be held to account for this

It (the sell out ploy) does look rushed - symptoms of may be a Board caught out asleep & napping until too late,
then operating hastily after having had a big fright

No offer to existing shareholders for a Cap Raise either

There could be interesting questions on how Directors explain a reduction in NTA from 70c down to presumably nothing out of this
when they have authorised release of Financial Statements in just the past 6 months showing Net Assets far north of Nothing.

Do they have obligations to all shareholders arising out of this ?

I'm damned sure the existing Finance Company Book must have some pretty good value (subject to Covid-19 adjustment)

Why did they come out saying their bank ASB were happy financiers comfortable with things just a few weeks ago ?

Why the urgency to sell the jewels out to a Chilled out Investor with a curious liking for sorts of listed junk ?

Why does he need finance for this ?

[blackcap]

Agree with both of you - Ogg & Winner



There could be interesting questions on how Directors explain a reduction in NTA from 70c down to presumably nothing out of this
when they have authorised release of Financial Statements in just the past 6 months showing Net Assets far north of Nothing.
?

Why does he need finance for this ?

1. You have to wonder what value if any auditors actually add by looking at accounts and ticking them off.

2. If he needs finance he might be denied in this climate.

If I were a shareholder in SCY I would rather take my chances at liquidation than getting nothing so I would be voting NO. But thanks to Percy I sold out in the 40's so have watched the ensuing train wreck with horror. Told my father to get out in the 40's, he ended up selling last week at 13. something.

[CD_CHCH]

Smiths City confirms that it has made progress against the conditions for the sale of its business to Polar Capital. The sole outstanding condition is now Smiths City shareholder approval.

https://www.nzx.com/announcements/353466

Not sure how willing shareholders will be to vote for a guaranteed loss...

[nztx]

COLIN NEAL appears to be a bit presumptious that his Buy will actually go through, in flogging the SMITHS CITY Name for his new companies:



SMITHS CITY (2020) LIMITED

https://coys.co.nz/:entity?no=7996258&nzbn=9429048207942&name=SMITHS+CITY+%282020%29+LIMITED


SMITHS CITY HOLDINGS (2020) LIMITED

https://coys.co.nz/:entity?no=8006561&nzbn=9429048239172&name=SMITHS+CITY+HOLDINGS+%282020%29+LIMITED

[dubya]

I wonder if the head trougher (salary last annual report $520,000-530,000) will be keeping their job?

[CD_CHCH]

26-Jan-17 Half Year results $2.16 Million profit - up 67.2% on prior year

31-Jan-17 Share price $0.75

2-Jun-17 Smiths City to distribute $5.7m of capital (11 cents per share) - Smiths City still expects to pay a final dividend as it has in previous years

21-Jun-17 Smiths City Transformation Underpins Earnings Increase

19-Jul-17 Annual Report to year ended 30 April $2.0 Million profit - up 53.8% on prior year. NTA 97 cents. Total Yearly Dividend 3.5 cents per share.

25-Oct-17 Smiths City Group today announces it has deferred its planned $5.7 million distribution of capital following a continuation of tough trading conditions.

7-Dec-17 Smiths City launching in Auckland with two new stores

21-Dec-17 Half Year results - Net profit before tax ‘break even’ Board declares fully-imputed interim dividend of 1.0 cents per share. NTA 94.96 cents.

16-Jan-18 Smiths City today announces it has put in place a share buyback facility as part of its ongoing commitment to ensure shareholders benefit from the group’s underlying performance improvements. The new facility gives Smiths City the option to buy back up to 5% of its shares over the coming 12 months. Smiths City is in a strong financial position.

28-Mar-18 Smiths City names Alastair Kerr as Chair

17-Apr-18 Trading losses for the year are expected to range between $1.25 million and $1.75 million compared to a trading profit of $2.0 million last year.

11-May-18 Smiths City now accepts the Employment Court’s Decision that the meetings constituted work as defined by the Minimum Wage Act and that this resulted in some employees being paid below the statutory minimum.

29-Jun-18 Financial Results for year to 30 April 2018 - Net loss before tax of $9.9 million - down from a net profit of $2.0 million in the prior year. No dividend. NTA 80 cents.

24-Jul-18 Smiths City to align pay rates with the living wage.

5-Sep-18 AGM - But the company has been thwarted in its ambitions by underinvestment. Most notably, it has underinvested in systems and in the store network.

20-Dec-18 Half year results Net profit before tax rises to $0.6 million from break-even in the same period last year. Significant investment in the store network and group information systems still required.

1-Jul-19 Financial Results For The Year To 30 April 2019 Smiths City result improves as transformation continues. Net losses before tax narrow to $1.9 million from a net loss of $9.9 million in the prior year. No dividend. NTA 77 cents.

5-Sep-19 AGM - We remain well funded. Smiths City’s regeneration has over the last two years been about dealing with a legacy of under investment. We need to improve and invest in systems that give us better visibility on inventories. Smiths City’s transformation continues with the rationalisation of the store footprint and investments in store formats and systems

13-Dec-19 Half Year results - Net losses before tax of $3.8 million. No dividend. NTA 67 cents. We have completely reset the management of our stores and we are now starting to see improvements in like-for-like store growth, online and commercial sales and margins. While there is still much work to do, we are now in a better position than we have been for some time.

18-Mar-20 Smiths City trading update – Covid-19. At this time, we anticipate our net loss in our financial result for the year to 30 April 2020 will be greater than the $1.9 million net loss recorded in the prior financial year. However, we cannot at this time quantify the extent of this anticipated loss given the current uncertainties and just over six weeks of trading remaining in our financial year. Smiths City has been focused on transforming its business over the past two years. This work had been progressing well. But given these new uncertainties, management will be revisiting our transformation plan and looking for additional gains and further efficiencies.

30-Mar-20 Following discussions last Friday, Smiths City’s bank ASB has agreed to delay by four weeks, the repayment of $1.5 million of the company’s $65 million Senior Secured Facility due for payment on Tuesday 31 March 2020. While Smiths City believes it has enough capital to cover its debts as they fall due, the company recognises the current capital structure is not sustainable given the outlook and the company must secure more funding. Smiths City is working with PWC to develop a strategy for addressing its capital structure. Chief Executive Roy Campbell said: “The Covid-19 pandemic has caused an unforeseen and unprecedented shock to the business and – like many other businesses – is posing immense challenges. “ASB’s extension of the facility demonstrated its willingness to support Smiths City through this extraordinary period and give Smiths City the space to engage in discussions with potential investors.

6-May-20 Smiths City online has continued to trade, and while we are pleased with the support we have received through the lockdown, this has obviously not been enough to make up the shortfall in sales from the closed stores. Moreover, once we open our doors - potentially as soon as we move to Alert Level 2 - we anticipate facing subdued trading conditions. Smiths City is continuing discussions with potential strategic investors, as foreshadowed by its announcement to the NZX on 30 March 2020. The company continues to retain the support of its bank ASB to see these discussions through to conclusion. From the analysis the company has undertaken, a restructuring is clearly necessary in order to secure investment and have a sustainable, post-pandemic retail business. The Board has therefore proactively commenced this restructuring process as its investor discussions continue. Smith City Chair Alastair Kerr said while it was likely that the restructure will result in the closure of some stores and job losses, the final outcome is dependent on how the consultation and negotiation process unfolds.

[winner69]

Thanks CD for putting all that together

Been lots of transformation, resetting etc hasn’t there but I think think the realisation has hit them that it’s a viable business model at the moment.

One sad story you’ve outlined.

[CD_CHCH]

As previously advised to the market Smiths City (NZX.SCY) has been undertaking a restructuring process. Smiths City can now advise that the following stores will close in the coming weeks:

• Mount Wellington
• Kapiti
• Porirua
• Whangarei
• Invercargill clearance centre
• Lower Hutt
• Christchurch outlet

The company is still negotiating new lease terms for other stores and will advise of any other store closures when the negotiations are concluded.
Smiths City expects to provide an update on the proposed sale soon.

https://www.nzx.com/announcements/353543

[CD_CHCH]

Smiths City names 'turnaround specialist' Roy Campbell as CEO - April 2015

https://www.nbr.co.nz/article/smiths-city-names-turnaround-specialist-roy-campbell-ceo-bd-171399


Roy Campbell

CEO

Smiths City Group.

May 2015 – Present 5 years 1 month

Christchurch, New Zealand

I was recruited to give this NZX listed, troubled national retailer a last bid at profitability. Over my 5 year tenure I comprehensively restructured the business. I Introduced a customer centric focus, shed costs, united the retail team, recruited rising stars from within the NZ retail market and implemented significant innovation strategies to maximise the ROI for as long as possible. The first three years saw a significant shift in brand awareness, purchasing capability, balance sheet improvement and positive culture shift. SCG grew its store numbers, rebranded its major stores, implemented a smarter purchasing scheme and focussed on the NZ consumer. The close of my tenure was due to the selling of the business.

https://nz.linkedin.com/in/roycampbell

[winner69]

Roy Campbell

CEO

Smiths City Group.

May 2015 – Present 5 years 1 month

Christchurch, New Zealand

I was recruited to give this NZX listed, troubled national retailer a last bid at profitability. Over my 5 year tenure I comprehensively restructured the business. I Introduced a customer centric focus, shed costs, united the retail team, recruited rising stars from within the NZ retail market and implemented significant innovation strategies to maximise the ROI for as long as possible. The first three years saw a significant shift in brand awareness, purchasing capability, balance sheet improvement and positive culture shift. SCG grew its store numbers, rebranded its major stores, implemented a smarter purchasing scheme and focussed on the NZ consumer. The close of my tenure was due to the selling of the business.

https://nz.linkedin.com/in/roycampbell


He gone? Or about to?

Did a sterling job that guy ....well done :t_down:

[CD_CHCH]

Smiths City enters receivership at Board’s invitation

Smiths City enters receivership at Board’s invitation
Appointment of receivers follows an agreement to sell stores and Smiths City Finance to Polar Capital

Smiths City (NZX.SCY) today announces it has invited its largest secured creditor ASB to appoint receivers to Smiths City Group Limited and Smiths City (Southern) Limited (“the Companies”). As a result, Colin Gower and Diana Matchett of BDO Christchurch and Andrew Bethell of BDO Auckland have been appointed as the Joint Receivers and Managers of the Companies.
The appointment of the Receivers follows the conditional agreement announced to the NZX on Monday 18 May 2020 to sell all of Smiths City Finance and most of Smiths City’s stores to Polar Capital, a business owned by Colin Neal, founder of the refrigerated logistics company Big Chill. It also follows Polar Capital’s confirmation on Wednesday 20 May 2020 that it had secured ongoing funding for the assets it intends to acquire.
Rather than putting the sale of the assets to Polar Capital to a shareholder vote, Directors sought to appoint receivers for the following reasons:
• Smiths City’s shareholders’ approval was the only condition outstanding.
• Smiths City’s ordinary shares will retain no value following the sale .
• Further delay risked jeopardising the completion of the sale and a reduction in the amount available to secured and unsecured creditors. The business cannot function without the confidence of suppliers and customers.
• A receivership would ensure the timely and orderly transition of the assets to Polar Capital, protect their value and the jobs of the approximately 350 people expected to transition to the new owners with the sale.
• The Board considered an insolvency process was inevitable. If shareholders rejected the transaction, the Board would have requested that Receivers be appointed as the financial position of the company was not sustainable.
In the knowledge that shareholder value was extinguished, the Board’s duty became to preserve as much value as possible for creditors. The appointment of Receivers today was necessary to fulfil that duty.
Immediately on appointment the receivers waived the remaining condition and settled the sale.
All stores are open as usual today. As advised to the market earlier today, Smiths City will close seven stores as the result of a restructure. Those stores: Mount Wellington, Porirua, Lower Hutt, Kapiti, Whangarei stores, the Invercargill clearance centre and the Christchurch outlet store, are expected to be closed in the coming weeks.
The Receivers’ first report on the state of affairs with respect to the property in receivership will be prepared no later than two months after their appointment.

Smiths City Chair Alastair Kerr said: “While the outcome is disappointing for shareholders, we are pleased to have been able to take steps to protect Smiths City’s legacy and the hundreds of jobs that will transition to the new business. The Board will now work to ensure an orderly transition of Smiths City Group to the Receivers.”
Polar Capital’s Colin Neal said: “Smiths City today opens a new chapter in its more than 100-year history of serving heartland New Zealand. All the stores we have acquired will be open for trading today, doing what they do best: offering great quality products, excellent value and no-nonsense service.
“Commitments made to customers will be unaffected by the receivership and the sale. If, customers have paid for a product they will get the product. I am looking forward to working with Smiths City’s people and the communities in which we operate to build on the company’s position at the heart of New Zealand retailing.”
The Board is also sending the enclosed letter to shareholders today to give further background on why this course of action has been necessary.

https://www.nzx.com/announcements/353582

[dubya]

Roy Campbell

CEO

Smiths City Group.

May 2015 – Present 5 years 1 month

Christchurch, New Zealand

I was recruited to give this NZX listed, troubled national retailer a last bid at profitability. Over my 5 year tenure I comprehensively restructured the business. I Introduced a customer centric focus, shed costs, united the retail team, recruited rising stars from within the NZ retail market and implemented significant innovation strategies to maximise the ROI for as long as possible. The first three years saw a significant shift in brand awareness, purchasing capability, balance sheet improvement and positive culture shift. SCG grew its store numbers, rebranded its major stores, implemented a smarter purchasing scheme and focussed on the NZ consumer. The close of my tenure was due to the selling of the business.

https://nz.linkedin.com/in/roycampbell



He gone? Or about to?

Did a sterling job that guy ....well done :t_down:


I wonder if the head trougher (salary last annual report $520,000-530,000) will be keeping their job?

I guess my question from yesterday has now been answered lol. Yes.....sterling service indeed @ approx $10,000 pay per week. Thanks for coming Roy.

[winner69]

At least Alistair sent his kind regards to shareholders

[blackcap]

Roy Campbell

CEO

Smiths City Group.

May 2015 – Present 5 years 1 month

Christchurch, New Zealand

. The close of my tenure was due to the selling of the business.

https://nz.linkedin.com/in/roycampbell


Should be a politician. Sounds deluded to me.

[winner69]

History repeats itself

Smiths City went into receivership some 39 years ago.

Came out of receivership 3 years later

[Southern Lad]

There is no prospect of the second leg of history repeating itself this time!

[CD_CHCH]

Smiths City names 'turnaround specialist' Roy Campbell as CEO - April 2015

https://www.nbr.co.nz/article/smiths...-ceo-bd-171399 (https://www.nbr.co.nz/article/smiths-city-names-turnaround-specialist-roy-campbell-ceo-bd-171399)



Roy Campbell

CEO

Smiths City Group.

May 2015 – Present 5 years 1 month

Christchurch, New Zealand

I was recruited to give this NZX listed, troubled national retailer a last bid at profitability. Over my 5 year tenure I comprehensively restructured the business. I Introduced a customer centric focus, shed costs, united the retail team, recruited rising stars from within the NZ retail market and implemented significant innovation strategies to maximise the ROI for as long as possible. The first three years saw a significant shift in brand awareness, purchasing capability, balance sheet improvement and positive culture shift. SCG grew its store numbers, rebranded its major stores, implemented a smarter purchasing scheme and focussed on the NZ consumer. The close of my tenure was due to the selling of the business.

https://nz.linkedin.com/in/roycampbell




I was recruited to give this NZX listed, troubled national retailer a last bid at profitability.

14-Apr-15 The Board of Smiths City Group announced late last year that our Managing Director for the last 15 years – Rick Hellings – was stepping down and as a result a search process had commenced. We are pleased to announce the appointment of Roy Campbell as Chief Executive Officer. Roy will start on 1st May 2015. In welcoming Roy we also wish to acknowledge the successful leadership of Smiths City through many periods of disruption and intense competition by Rick Hellings, our outgoing Managing Director. Rick has been with us for 30 years, half that time as Managing Director.

Audited full year financial results to 30 April 2015 - Profit before tax of $9.3 million up from $4.7 million in the prior year. NTA per share 90.16 cents. 3.5 cents per share Gross Dividend paid. Share price 56 cents (Yahoo Finance) - Looks pretty profitable to me before Roy started

30-Oct-2015 Sale of Colombo St property for $20 million

19-Jan-2016 Smiths City (Southern) Limited (Southern) has entered into a conditional agreement (Conditional Agreement) to purchase the business and assets of both Panmure Furniture City 1983 Limited (Furniture City) and its logistics operation Lucky Dragon Limited (Lucky Dragon). Auckland based, Furniture City, has stores in Auckland and Whangarei. Purchase price - $5.85m plus GST (if any)

1-Apr-2016 Purchase of Panmure Furniture City and Lucky Dragon Ltd settles

The first three years saw ~ balance sheet improvement

17-Apr-2018 Smiths City trading update - Trading losses for the year are expected to range between $1.25 million and $1.75 million compared to a trading profit of $2.0 million last year. In addition to the trading loss, Smiths City expects to make an impairment provision of $4.8 million relating to the leases on stores that have consistently underperformed due to factors including: changing trading patterns, a shift in local conditions due to the opening of new retail hubs, and onerous leases. The net loss before tax is forecasted to range between $7.0 million and $8.0 million compared to a profit of $2.4 million in the same period last year. “Meanwhile, the disruptions to trading caused by the refurbishment and rebranding of the former Furniture City stores in Auckland and Whangarei and the closure of the Ngauranga Gorge store in Wellington in November have weighed heavily on the results. “The rebranded Auckland stores, which reopened at the start of December, are not yet delivering to our expectations. Although we are making strong sales of appliances – a category previously not available in the former Furniture City stores – furniture sales are yet to recover to levels prior to the rebrand.

Audited full year financial results to 30 April 2018 - Net loss before tax of $9.9 million down from a net profit of $2.0 million in the prior year. NTA down to 80 cents. Dividend cancelled. Share price 45 cents (Yahoo Finance) - 3 year change from $9.3 million profit to $9.9 million loss ($19.2 million variance) NTA reduced by 11.3%. Share price down 19.6%. Dividend down 100%.

The close of my tenure was due to the selling of the business.

May 2020 Smiths City enters receivership following the sale which involves the acquisition of all of Smiths City Finance and the great majority of Smiths City’s stores. Directors believe Smiths City’s ordinary shares will retain no value.

2 out the 3 Panmure Furniture Stores purchased in 2016 to be closed (Mount Wellington & Whangarei) The other Panmure Furniture Store in Wairau Park was closed Nov 2019. So a few years after paying $5.85 millon plus GST (if any) for the chain all the stores have been shut. Perhaps selling their major asset - the Colombo St site - was a really stupid idea.

Assuming the CEO to be the highest paid staff member and taking the lower of the salary band figures published in the 30-Apr-2016 to 30-Apr-2019 annual reports show that presumably Roy was paid at least $2.25 million during those 4 years excluding whatever he has been paid to 30-Apr-2020.

2016 $ 480,000
2017 $ 670,000
2018 $ 580,000
2019 $ 520,000
2020 $ ???
Total $ 2,250,000

Well the business was certainly 'turned around' - perhaps not quite in the direction the shareholders would have preferred. Question is did shareholders get value for money for the remuneration paid to the 'turnaround specialist' ?

‬

[blackcap]

If I were a shareholder I would want to know one thing.

At the last HY I note that there is cash in the bank of $9m and NTA of 67 cents per share. (being operationally cash flow positive as well albeit just)

What have the company done with that NTA and cash? Or if the NTA was not realistic, why have the auditors not said anything.

Either way there is a discrepancy or something very illogical going on.

[winner69]

Obviously not that much cash left in the kitty

Many have no job ....but some saved

https://www.stuff.co.nz/business/121608855/smiths-city-rescue-leaves-115-staff-in-the-cold

[CD_CHCH]

If I were a shareholder I would want to know one thing.

At the last HY I note that there is cash in the bank of $9m and NTA of 67 cents per share. (being operationally cash flow positive as well albeit just)

What have the company done with that NTA and cash? Or if the NTA was not realistic, why have the auditors not said anything.

Either way there is a discrepancy or something very illogical going on.

Smiths City Directors as follows:

Alastair Gibson Kerr - Chair
Tony Donald Allison
Benjamin John Powles
Antony David Karp

30-Apr-19 Audited Annual Report. NTA 77 cents per share. Shareholders’ equity as at 30 April 2019 $42.6 million

5-Sept-19 2019 ASM Speeches - Alastair Kerr "We remain well funded"

13-Dec-19 Smiths City Interim Financial Statements for the 6 months ending 31 October 2019. NTA 67 cents per share. Shareholders’ equity as at 31 October 2019 $37.4 million (Unaudited)

18-May-20 Directors believe Smiths City’s ordinary shares will retain no value following the sale.

So in the last year under the directors watch $42 million of shareholder's equity has been lost.

This is in addition to the creditors and landlords that are out of pocket, and the human cost of 115 hardworking loyal staff no longer employed, and according to the media article income reductions for others taken on by Smiths City (2020)

The directors should be ashamed of themselves.

[Ogg]

In the knowledge that shareholder value was extinguished, the Board’s duty became to preserve as much value as possible for creditors.

I question the legality of this statement.

There are ‘safe harbour’ provisions that legally protect companies from the effects of Covid-19. The government amended sections 135 and 136 of the Companies Act 1993

https://companies-register.companiesoffice.govt.nz/help-centre/company-directors/safe-harbour-for-company-directors/

-the company was able to pay its debts as they fell due on 31 December 2019
-the company will be able to pay its debts as they fall due within 18 months

I am not a SCY shareholder but I believe a class action lawsuit against the directors of SCY may be warranted.

[nztx]

I question the legality of this statement.

There are ‘safe harbour’ provisions that legally protect companies from the effects of Covid-19. The government amended sections 135 and 136 of the Companies Act 1993

https://companies-register.companiesoffice.govt.nz/help-centre/company-directors/safe-harbour-for-company-directors/

-the company was able to pay its debts as they fell due on 31 December 2019
-the company will be able to pay its debts as they fall due within 18 months

I am not a SCY shareholder but I believe a class action lawsuit against the directors of SCY may be warranted.


Yes - agree there .. small holder here but would seriously consider joining a Class Action Lawsuit on this

In the very least - the SCY Reporting & Directors' actions warrant investigation

[nztx]

From my analysis of SCY's actions over the past month, it appears to me that the Board have NOT tried very hard
and been more interested in divesting the whole business than protecting it and keeping things together in the listed company

Appointing Receivers so that the Sale can be shunted through pangs of a Board running from their responsibilities

If companies like KMD & SKT can easily do Cap Raises - then why did SCY's Board not do similar ?

Was not doing so in fact reckless behaviour on part of the Board of SCY contrary to their statements of
trying to preserve the business ? It further doesn't say much for a Board that obviously has now demonstated
that it had little interest in navigating a short period of choppy waters to the other side under their direction.

They had time to do a Cap Raise and the small number of issued shares would have facilitated a Cap Raise to more than
adequately provide sufficient boards to cover the Covid-19 gaping holes appearing in the floor.

What were they thinking in seeking to sell the crystal jewels at any price & wipe out all shareholder value ?

[blackcap]

Yes - agree there .. small holder here but would seriously consider joining a Class Action Lawsuit on this

In the very least - the SCY Reporting & Directors' actions warrant investigation

Totally agree, if I were a shareholder, small or large, I would be seeking legal redress.

[Southern Lad]

From my analysis of SCY's actions over the past month, it appears to me that the Board have NOT tried very hard
and been more interested in divesting the whole business than protecting it and keeping things together in the listed company

Appointing Receivers so that the Sale can be shunted through pangs of a Board running from their responsibilities

If companies like KMD & SKT can easily do Cap Raises - then why did SCY's Board not do similar ?

Was not doing so in fact reckless behaviour on part of the Board of SCY contrary to their statements of
trying to preserve the business ? It further doesn't say much for a Board that obviously has now demonstated
that it had little interest in navigating a short period of choppy waters to the other side under their direction.

They had time to do a Cap Raise and the small number of issued shares would have facilitated a Cap Raise to more than
adequately provide sufficient boards to cover the Covid-19 gaping holes appearing in the floor.

What were they thinking in seeking to sell the crystal jewels at any price & wipe out all shareholder value ?

From the SCY announcement of 18 May:

“In addition to taking steps to preserve cash and contain costs in the face of these new trading conditions, the Board has explored numerous options to secure an injection of new capital. These efforts have included discussions with our existing largest shareholders, and other potential strategic investors, to underwrite a broader capital raising. We have been helped throughout this wide-ranging process by our advisers PwC".

So we have:



A one in a hundred (or three hundred) year economic shock
Existing large shareholders not wanting too put in cash
Trying to get a new strategic investor to underwrite a capital raising
PwC doing their best to come up with a solution


Sounds to me like this is a long way from 'the Board have not tried very hard'.

[winner69]

Smiths City have been munted and on the slippery slope to oblivion for a few years ....and it was patently clear that thevslope was getting steeper.

[jmsnz]

Smiths City have been munted and on the slippery slope to oblivion for a few years ....and it was patently clear that thevslope was getting steeper.

I have never been a holder not had any interest in being one. Just going into one of their stores always left me wondering why I bothered. I could could get some whiteware at non-competitive prices or maybe select from a small range of relatively outdated styled furniture. If that didn't suit then there was always the narrow range of camping and cycling gear. It always seemed odd and from days gone by to be honest.

Of course none of that is a defense for any destruction of shareholder wealth that may have occured.

[winner69]

I have never been a holder not had any interest in being one. Just going into one of their stores always left me wondering why I bothered. I could could get some whiteware at non-competitive prices or maybe select from a small range of relatively outdated styled furniture. If that didn't suit then there was always the narrow range of camping and cycling gear. It always seemed odd and from days gone by to be honest.

Of course none of that is a defense for any destruction of shareholder wealth that may have occured.

See another lot of ‘outdated’ stores being closed ....H&J Smith

[CD_CHCH]

From my analysis of SCY's actions over the past month, it appears to me that the Board have NOT tried very hard
and been more interested in divesting the whole business than protecting it and keeping things together in the listed company

Appointing Receivers so that the Sale can be shunted through pangs of a Board running from their responsibilities

If companies like KMD & SKT can easily do Cap Raises - then why did SCY's Board not do similar ?

Was not doing so in fact reckless behaviour on part of the Board of SCY contrary to their statements of
trying to preserve the business ? It further doesn't say much for a Board that obviously has now demonstated
that it had little interest in navigating a short period of choppy waters to the other side under their direction.

They had time to do a Cap Raise and the small number of issued shares would have facilitated a Cap Raise to more than
adequately provide sufficient boards to cover the Covid-19 gaping holes appearing in the floor.

What were they thinking in seeking to sell the crystal jewels at any price & wipe out all shareholder value ?


I tend to agree wholeheartedly with NZTX

Consider the following statements made, or authorised, by the directors:

30-Apr-19 Annual Report
PRINCIPLE 8 – SHAREHOLDER RELATIONS

The Board should foster constructive relationships with shareholders that encourage them to engage with the company.
The company values its dialogue with institutional and private investors and is committed to giving all shareholders comprehensive timely and equal access to information about its activities.
The Board aims to ensure that shareholders are informed of all information necessary to assess the Board’s performance. They do so through a communication strategy which includes:
• Periodic and continuous disclosure to NZX;
• Reporting of Half yearly and annual results and through the publication of the Annual Report;
• The annual shareholders’ meeting and any other meetings called to obtain approval for Board actions as appropriate; and
• The company’s website.

Given the way in which the sale of the company's assets was conducted without shareholder input or communication there was obviously a failure by directors to adhere to Principle 8. Also following the 18-May-20 sale announcement NZX regulators had to request further information from the directors over the sale due to non-compliance with section 129 of the Companies Act, hence the clarification issued late 20-May-20

Also from the 2019 Annual Report:

A provision for an onerous lease is recognised when the Group retains a lease obligation after vacating a property before the expiry of the lease term, or where the Group has determined that a location is unlikely to return an economic benefit in excess of the cost of the lease over its remaining term, having had regard for the desirability of the location for retail operations, the ability to sub lease, and the optimal trading prospects.
As at 30 April 2019 two leases were considered onerous due to the Board decision to close the sites with a further two considered onerous due to continuing losses. Only one new lease was considered onerous for the year ended 30 April 2019.

If the above was accurate why were 7 stores considered unprofitable and closed instead of being sold to the new owner?

13-Dec-19 Media Release - Smiths City reports operational improvements.
- Same store sales fell by 14.6%
- Net losses before tax of $3.8 million, down from a net profit before tax (NPBT) of $0.6 million. $1.5 million of losses associated with the rationalisation to the company’s store footprint in Auckland.

If this is the directors’ idea of improvement I'd hate to see what they consider a really bad result. Also remember the board approved the purchase of the Auckland stores for $5.85 million in 2016.

30-Mar-20 Following discussions last Friday, Smiths City’s bank ASB has agreed to delay by fourweeks, the repayment of $1.5 million of the company’s $65 million Senior Secured Facility due for payment on Tuesday 31 March 2020.
While Smiths City believes it has enough capital to cover its debts as they fall due, the company recognises the current capital structure is not sustainable given the outlook and the company must secure more funding. Smiths City is working with PWC to develop a strategy for addressing its capital structure. Smiths City is committed to keeping the market informed and will provide more information as it becomes available.”

18-May-20 Smiths City enters conditional agreement for sale of its retail and finance operations
Smiths City (NZX.SCY) today announces it has negotiated a conditional agreement to sell Smiths City businesses in a transaction that values the assets at around $60 million.
The transaction values the assets to be transferred to PolarCapital at around $60 million, however with the purchaser assuming some debt and other liabilities, the net amount expected to be received is $8 million.

22-May-20 Rather than putting the sale of the assets toPolar Capital to a shareholder vote, Directors sought to appoint receivers for the following reasons:
• Smiths City’s shareholders’ approval was the only condition outstanding.
• Smiths City’s ordinary shares will retain no value following the sale .
• Further delay risked jeopardising the completion of the sale and a reduction in the amount available to secured and unsecured creditors. The business cannot function without the confidence of suppliers and customers.
• A receivership would ensure the timely and orderly transition of the assets to Polar Capital, protect their value and the jobs of the approximately 350 people expected to transition to the new owners with the sale.
• The Board considered an insolvency process was inevitable. If shareholders rejected the transaction, the Board would have requested that Receivers be appointed as the financial position of the company was not sustainable.
In the knowledge that shareholder value was extinguished, the Board’s duty became to preserve as much value as possible for creditors. The appointment of Receivers today was necessary to fulfil that duty.
Unfortunately, the proceeds of the sale, combined with the value of residual assets, will not sufficiently cover the Group’s liabilities to unsecured creditors (in particular under leases that are not being transferred). Consequently, the Board advised the market earlier this week that the sale would likely result in the loss of all shareholder value in theCompany.

Well no the sale obviously doesn't value the assets at $60 million if only $8 million is received from the sale. 2019 Audited Annual Report listed NTA as 77 cents per share. There are 52,688,153 shares on issue which equates to a total net asset value of $40.5 million. Are we meant to believe the absolute best the directors could get for $40 million worth of assets was $8 million and they agreed to keep more than $8 million of liabilities as well?

Why was the sale not put to the shareholders to vote upon as required by section 129 of the Companies Act?

My thoughts are the directors knew the deal would not standup to scrutiny and they wouldn't be able to explain how $42 million in equity had been destroyed under their watch. Inviting the bank to put the company into receivership was a coward's way of avoiding facing the shareholders as how on earth did they plan to sell the deal "Hey shareholders vote for this deal we have put together that will totally wipe out your capital and cause creditors to lose money as well?"

Sky TV showed how a successful capital raise can be done as did Kathmandu.

The directors job wasn't to ensure a timely transition of assets to Polar Capital, nor to ensure value is protected for Polar Capital. The directors had a duty of care to the shareholders and creditors. Disposing of the assets for below market value while retaining debt in the shell of the company is hardly preserving value for shareholders or creditors.

"The Board considered an insolvency process was inevitable" Why was the recently introduced Business Debt Hibernation and Safe Harbour regime not used to allow the company to trade its way into a better situation or is this an admission that the company has been trading while insolvent all along?

[CROESUS U.T.]

Leopards and spots -History repeating itself - they were devious in the aftermath of the '87 crash, especially in their shafting of staff they had inherited from takeover of Smith & Brown.

[blackcap]

Very good points made there CD_CHCH

Has anyone considered approaching the NZSA for some input into this and see if they can agitate on behalf of retail investors. Something needs to be done about events like this to stop this sort of behaviour being perpetuated.

The only point I would point out is that you wrote the following "The directors had a duty of care to the shareholders and creditors". Under NZ companies law the shareholders do not really have many rights as far as directors duties go. The only real duty that directors have is to the company itself and the creditors. Not to the shareholders. So in their minds, directors probably think they have fulfilled their duties admirably.

[winner69]

The only page in the financials worth looking at is the Cash Flow Statement ....and the reconciliation to profit is always interesting. All the other stuff is superfluous ...hard to fudge cash flows.

From their Cashflows over recent years you can see why they are essentially broke now.... some would say blindingly obvious

No wonder the big shareholders or others wanted to put more cash in.

[CD_CHCH]

Very good points made there CD_CHCH

Has anyone considered approaching the NZSA for some input into this and see if they can agitate on behalf of retail investors. Something needs to be done about events like this to stop this sort of behaviour being perpetuated.

The only point I would point out is that you wrote the following "The directors had a duty of care to the shareholders and creditors". Under NZ companies law the shareholders do not really have many rights as far as directors duties go. The only real duty that directors have is to the company itself and the creditors. Not to the shareholders. So in their minds, directors probably think they have fulfilled their duties admirably.

I'm not a member of the NZSA but hopefully someone who is has approached them to see if they will seek some answers.

You make a valid point that the directors in their own minds probably think they have fulfilled their duties admirably, however I'm sure none of the shareholders who stand to lose their capital nor the many creditors who will end up out of pocket will agree.

I wonder if the director's statement from 30th March 2020 'Smiths City believes it has enough capital to cover its debts as they fall due' will be examined in detail.

I can only imagine what the staff who were made redundant only to see their jobs advertised a few days later, and the staff who ended up with reduced hours and pay think of the mismanagement of the company.

While there has been a massive destruction of capital, and financial cost for both shareholders and creditors let us never forget the impact this has had, and will still be having, upon the lives of the staff and their families.

[winner69]

A photo taken by a shareholder at the last ASM

So cool

[CD_CHCH]

https://www.stuff.co.nz/business/prosper/121673233/coronavirus-no-sales-at-level-4-but-no-redundancies-says-upbeat-briscoes-boss (https://www.stuff.co.nz/business/prosper/121673233/coronavirus-no-sales-at-level-4-but-no-redundancies-says-upbeat-briscoes-boss)



This simply highlights the difference between a decent retailer and the mismanagement team at Smiths City:




Briscoes

Smiths City







CEO - Rod Duke

CEO - Roy James Campbell



$978,000 - 2019 Salary

$531,420 - 2019 Financial Year Salary (as per 2019 Annual Report)



CEO Covid-19 Pay cut = 25%

CEO Covid-19 Pay cut = 20%







Staff paid 100%

Staff paid 80%



Redundancies = nil

Redundancies = 25% of staff







Shareholder Capital preserved

$40 million in Shareholder Capital wiped out



$67.4 million in cash

Creditors to face a loss



$62.2 million net profit

Company in receivership





The results speak for themselves. It's a shame the board at Smiths City were asleep at the wheel...

[Sideshow Bob]

This wouldn't have helped Smith's City.....

Smiths City sales manager ordered to pay back $732k after running competing business - NZ Herald (https://www.nzherald.co.nz/nz/smiths-city-sales-manager-ordered-to-pay-back-732k-after-running-competing-business/RW2U5666MWQXWAPVY7UJTPFKII/)

[percy]

26-Jan-17 Half Year results $2.16 Million profit - up 67.2% on prior year

31-Jan-17 Share price $0.75

2-Jun-17 Smiths City to distribute $5.7m of capital (11 cents per share) - Smiths City still expects to pay a final dividend as it has in previous years

21-Jun-17 Smiths City Transformation Underpins Earnings Increase

19-Jul-17 Annual Report to year ended 30 April $2.0 Million profit - up 53.8% on prior year. NTA 97 cents. Total Yearly Dividend 3.5 cents per share.

25-Oct-17 Smiths City Group today announces it has deferred its planned $5.7 million distribution of capital following a continuation of tough trading conditions.

7-Dec-17 Smiths City launching in Auckland with two new stores

21-Dec-17 Half Year results - Net profit before tax ‘break even’ Board declares fully-imputed interim dividend of 1.0 cents per share. NTA 94.96 cents.

16-Jan-18 Smiths City today announces it has put in place a share buyback facility as part of its ongoing commitment to ensure shareholders benefit from the group’s underlying performance improvements. The new facility gives Smiths City the option to buy back up to 5% of its shares over the coming 12 months. Smiths City is in a strong financial position.

28-Mar-18 Smiths City names Alastair Kerr as Chair

17-Apr-18 Trading losses for the year are expected to range between $1.25 million and $1.75 million compared to a trading profit of $2.0 million last year.

11-May-18 Smiths City now accepts the Employment Court’s Decision that the meetings constituted work as defined by the Minimum Wage Act and that this resulted in some employees being paid below the statutory minimum.

29-Jun-18 Financial Results for year to 30 April 2018 - Net loss before tax of $9.9 million - down from a net profit of $2.0 million in the prior year. No dividend. NTA 80 cents.

24-Jul-18 Smiths City to align pay rates with the living wage.

5-Sep-18 AGM - But the company has been thwarted in its ambitions by underinvestment. Most notably, it has underinvested in systems and in the store network.

20-Dec-18 Half year results Net profit before tax rises to $0.6 million from break-even in the same period last year. Significant investment in the store network and group information systems still required.

1-Jul-19 Financial Results For The Year To 30 April 2019 Smiths City result improves as transformation continues. Net losses before tax narrow to $1.9 million from a net loss of $9.9 million in the prior year. No dividend. NTA 77 cents.

5-Sep-19 AGM - We remain well funded. Smiths City’s regeneration has over the last two years been about dealing with a legacy of under investment. We need to improve and invest in systems that give us better visibility on inventories. Smiths City’s transformation continues with the rationalisation of the store footprint and investments in store formats and systems

13-Dec-19 Half Year results - Net losses before tax of $3.8 million. No dividend. NTA 67 cents. We have completely reset the management of our stores and we are now starting to see improvements in like-for-like store growth, online and commercial sales and margins. While there is still much work to do, we are now in a better position than we have been for some time.

18-Mar-20 Smiths City trading update – Covid-19. At this time, we anticipate our net loss in our financial result for the year to 30 April 2020 will be greater than the $1.9 million net loss recorded in the prior financial year. However, we cannot at this time quantify the extent of this anticipated loss given the current uncertainties and just over six weeks of trading remaining in our financial year. Smiths City has been focused on transforming its business over the past two years. This work had been progressing well. But given these new uncertainties, management will be revisiting our transformation plan and looking for additional gains and further efficiencies.

30-Mar-20 Following discussions last Friday, Smiths City’s bank ASB has agreed to delay by four weeks, the repayment of $1.5 million of the company’s $65 million Senior Secured Facility due for payment on Tuesday 31 March 2020. While Smiths City believes it has enough capital to cover its debts as they fall due, the company recognises the current capital structure is not sustainable given the outlook and the company must secure more funding. Smiths City is working with PWC to develop a strategy for addressing its capital structure. Chief Executive Roy Campbell said: “The Covid-19 pandemic has caused an unforeseen and unprecedented shock to the business and – like many other businesses – is posing immense challenges. “ASB’s extension of the facility demonstrated its willingness to support Smiths City through this extraordinary period and give Smiths City the space to engage in discussions with potential investors.

6-May-20 Smiths City online has continued to trade, and while we are pleased with the support we have received through the lockdown, this has obviously not been enough to make up the shortfall in sales from the closed stores. Moreover, once we open our doors - potentially as soon as we move to Alert Level 2 - we anticipate facing subdued trading conditions. Smiths City is continuing discussions with potential strategic investors, as foreshadowed by its announcement to the NZX on 30 March 2020. The company continues to retain the support of its bank ASB to see these discussions through to conclusion. From the analysis the company has undertaken, a restructuring is clearly necessary in order to secure investment and have a sustainable, post-pandemic retail business. The Board has therefore proactively commenced this restructuring process as its investor discussions continue. Smith City Chair Alastair Kerr said while it was likely that the restructure will result in the closure of some stores and job losses, the final outcome is dependent on how the consultation and negotiation process unfolds.

Interesting....................................

[winner69]

Smiths City in Rship goingbto be delisted next week

Explored a reverse listing listing but no joy

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/406125/387846.pdf

[Sideshow Bob]

Smiths City in Rship goingbto be delisted next week

Explored a reverse listing listing but no joy

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/406125/387846.pdf

And it got flagged as "price sensitive"......:mellow:

[CD_CHCH]

15-May-20 Trading halt on Smiths City Group Limited shares pending the release of an announcement by the company.

18-May-20 Sale of Smiths City Business announced - Directors anticipate the agreement settling on 22 May 2020.

20-May-20 Smiths City Conditional Sale - Clarification
Smiths City wishes to clarify the announcement released on Monday, 18 May. The proposed sale to Polar Capital is conditional on:

• Purchaser finance being confirmed.
• Smiths City shareholder approval.
• Smiths City financier approval.

Currently all conditions remain outstanding. The completion date under the sale and purchase agreement is the business day after the agreement becomes unconditional. Smiths City anticipates being in a position to update the market more fully this Friday 22 May.

21-May-20 Conditions Update
Smiths City confirms that it has made progress against the conditions for the sale of its business to Polar Capital. The sole outstanding condition is now Smiths City shareholder approval.

22-May-20 Smiths City enters receivership at Board’s invitation
Rather than putting the sale of the assets to Polar Capital to a shareholder vote, Directors sought to appoint receivers for the following reasons:
• Smiths City’s shareholders’ approval was the only condition outstanding.
• Smiths City’s ordinary shares will retain no value following the sale .
• Further delay risked jeopardising the completion of the sale and a reduction in the amount available to secured and unsecured creditors. The business cannot function without the confidence of suppliers and customers.
• A receivership would ensure the timely and orderly transition of the assets to Polar Capital, protect their value and the jobs of the approximately 350 people expected to transition to the new owners with the sale.

https://www.nzx.com/companies/SCY/announcements?utf8=%E2%9C%93&year=2020



SMITHS CITY GROUP LIMITED (121923)
Historic data for directors

Tony Donald ALLISON
Appointment Date: 24 Jun 2016
Ceased date: 22 May 2020

https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/121923/directors?

********

SMITHS CITY (2020) LIMITED (7996258)

Directors (4 directors in total)

Tony Donald ALLISON
Appointment Date: 25 May 2020

https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/7996258/directors?

Shareholdings

SMITHS CITY HOLDINGS (2020) LIMITED 112 shares (100.00%)

https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/7996258/shareholdings

********

SMITHS CITY HOLDINGS (2020) LIMITED (8006561)

Directors (4 directors in total)

Tony Donald ALLISON
Appointment Date: 22 Dec 2020

https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/8006561/directors?

Shareholdings

Allocation 1: 84 shares (75.00%)
POLAR CAPITAL LP

Allocation 2: 21 shares (18.75%)
GCA LEGAL TRUSTEE 2020 LIMITED
Rosalind ALLISON
Tony Donald ALLISON

Allocation 3: 7 shares (6.25%)
Tony Donald ALLISON

https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/8006561/shareholdings?

[CD_CHCH]

A brief history of Smiths City (or Smiths City Market for those of us who have been around for a while)

Founded in 1918 by Henry Cooper Smith as an auction house on Colombo St, the business initially auctioned grain, livestock and general goods, but later began to specialize in new and used furniture and hardware.

Smiths City Market Limited was registered as a private company in 1938 and was floated as a public company in 1972.

1st May 1991 The company was placed in receivership.

31st Dec 1991 The company was delisted due to receivership.

11th Mar 1994 Smiths City Group Limited was released from receivership – being the first publicly listed company in New Zealand to recover from receivership.

31st Oct 1998 Saw the end of the 5 year Scheme of Arrangement where creditors had become capital noteholders. 1998 also saw a dividend paid to shareholders - the first in 10 years.

November 2003 Smiths City Group Limited listed on the NZAX.

July 2004 Smiths City Group (SCY) transferred trading of its shares to the NZSX.

15th May 2020 Trading halt on Smiths City Group Limited shares pending the release of an announcement by the company.

22nd May 2020 Smiths City enters receivership at Board’s invitation in order to complete the sale of assets to Polar Capital.

9th Feb 2023 SCY - Smiths City Group Limited (in receivership) Delisted from NZX as at the close of business.


And just like that, it is all over...

[winner69]

Probably doing well under Polar Capital

Younever know …might get listed again

[nztx]

Probably doing well under Polar Capital

Younever know …might get listed again


Would it be doing well ?

The Sector has a lot of competition & if SCY couldn't make a go of it without
spiralling downwards then the current owners with similar team & MO may
be finding similar head winds prevailing, if not worse ..

If it relisted many may be very wary about going anywhere near after
past business track record of receiverships etc

[nztx]

https://www.nzherald.co.nz/business/polar-capitals-hello-foods-20m-in-creditor-claims-in-receivership-and-liquidation/I3NT7VWGUNAXJJZNADBSE5OK7Q/

Polar Capital’s Hello Foods: $20m in creditor claims in receivership and liquidation

Good Grief - wonder how the reincarnated Smith City in Colin Neal's huddle of businesses is going ?

Saw a TV advert in past week from Smith City after quite a period of not seeing any