Discount department store The Reject Shop expects to post approximately $10.5 million in net profit for the six months to 31 December 2018.
TRS chairman Bill Stevens noted that this guidance is consistent with the company’s previous forecast, despite the call by Allensford Pty Ltd, which has put forward a takeover offer, for TRS to release its sales figures to shareholders.
“Allensford’s replacement bidder’s statement… contained a number of speculative comments in respect of The Reject Shop’s trading performance over the first half of FY2019 that have been shown to be unfounded,” Stevens said in a letter to shareholders.
“Amid a backdrop of highs and lows over the past few years, your Board continues to believe in the long-term growth prospects of The Reject Shop’s business, which has remained profitable despite the extremely challenging and fluctuating retail environment.”
The business reaffirmed that it recommends shareholders reject the takeover bid, which it has previously dismissed as an “unsolicited and highly opportunistic, low-ball offer”, and that it undervalues the company’s shares and fails to account for future growth plans.
The Allensford offer, made a month after The Reject Shop slashed its half yearly profit guidance by approximately 40 per cent, amounts to $2.70 per share, slightly less than the retailer’s current trading price of $2.72 per share, and is set to expire on 6 February 2019.
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