Enero shares drop as BMF and Naked struggle

enero logoShares in Enero – the parent company of agencies including BMF and Naked Communications – today regained some ground after yesterday recording an 11% fall on the back of poor trading figures.

Yesterday’s update to the ASX saw shares fall from 44c to 39c, but they today recovered to 42c.

The announcement revealed that operating profits for the company in the first four months of the financial year were less than half the same period last year, based on a comparison to the companies remaining within the business. The fall in operating EBITDA (earnings before interest, taxation, depreciation and amortisation) was from $3.8m to $1.7m on a like-for-like basis. These numbers excluded companies that contributed profits last year but have since been sold or closed – including those saw a fall in profit from $9.9m to $1.8m.

According to the update, the fall came in part because of BMF’s loss of Commonwealth Bank as a retained client. It also said that Naked had been “impacted by difficult trading conditions in Europe”.

The update said that Hotwire, Frank PR and The Leading Edge had a “consistent” performance compared to the previous year.

Because individual companies are not broken out, it was not possible to see from the update which agencies were profitable or loss making.

The current capitalisation of Enero on the ASX is $36m. The company has an excess cash balance of $7.5m “for investment purposes”.

The announcement said that “approximately $2m in EBITDA” profits would be invested in “senior leadership and talent management programs across key markets” for Naked along with investment in new systems and “partnerships” with data and technology companies over the second half of the year.

With the company having only delivered operating profits of $1.8m in the year to date, it is unclear whether this $2m will potentially mean the company will record a loss for the financial year. At the time of posting, Enero had not returned Mumbrella’s request for clarification.

Richard Dunmall was named new CEO of Naked earlier this month.

Comments


  1. Aunty viewer
    28 Nov 12
    3:08 pm

  2. “The company has an excess cash balance of $7.5m “for investment purposes” ”

    I think it’s a fair bet that’s the same $7.5M that the owners of BWM paid to buy their agency back.

  3. Sean
    28 Nov 12
    5:08 pm

  4. The cash balance at the end of October was $21m. The $7.5m is excess over normal requirements.

  5. The Awful Truth
    28 Nov 12
    5:46 pm

  6. It’s painful watching this slow death. No one can save a floored business model like this. Pack up,boys and head home. It’s over.

  7. Photon hater
    29 Nov 12
    2:17 pm

  8. How much does Reg Grundy own these days?

    I wonder if he still talks to Tim Hughes?