Silver Chef Limited’s Share Price Plunged on ASX

Shareholder Update: Silver Chef Limited’s (ASX: SIV) stock plunged 15.2 per cent on July 04, 2018 (3:45 PM AEST) following the announcement of shareholder update wherein the company recorded lower than expected growth in the last quarter within the Hospitality segment. As a result, the company has downgraded its full-year guidance and expects the Group’s underlying pre-tax profit in the range of $17 Mn to $18 Mn from the previous guidance of $20 Mn to $24 Mn. The main reasons to downgrade its guidance are revenue shortfalls from rental contracts, increased impairments on rental arrears and suspended assets, and extra finance costs associated with the recent bank restructure. However, the company has resolved the number of areas that will impact its FY18 statutory result scheduled to be released to the ASX in late August 2018. This includes finalization of the discussions with ASIC and the accounting implications from the potential realization of some portion of the GoGetta assets earlier than in the normal course of business. Based on that, SIV expects that the FY18 statutory loss will be substantially higher than the previous FY18 net profit after tax guidance of between $9 Mn and $12 Mn. While these necessary changes have resulted in some short-term pain, both the Board and Management are confident that they will deliver the Group’s historical levels of growth and returns over the next few years. The stock was trading at $3.300 on July 04, 2018, before market close.


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