“Directly Impacted”: Mosaic Sales Slump But Retailer Reassures On Dividend

By Glenn Dyer | More Articles by Glenn Dyer

Mosaic Brands, the ASX-listed parent of women’s clothing chains including the popular Noni B, Rivers, and Millers says sales across its brands have taken a “significant” hit from the country’s bushfire crisis.

In a statement to the ASX on Tuesday, Mosaic said 20% of its 1,389 outlets across the country had been “directly impacted” by the fires, which would lead to an 8% drop in comparable sales for the December half. 32% of the group’s outlets are in regional areas where the impact of the fires on confidence has been especially severe.

Besides Noni B, Millers and Rivers, Mosaic’s other brands include W Lane, Katies, Rockmans, Crossroads, Autograph, and Beme.

Directors though see a 13% rise in the company’s underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) for the December half to around $33 million, from the first half of 2018-19. EBITDA (after non-recurring project costs) is expected to be circa $32 million, up 36% from $23.5 million,” directors said.

Despite the sales fall, Mosaic said it would maintain a dividend payout ratio of 60% to 70% of after-tax profit.

It also noted earnings in the six months to June would likely show higher growth, particularly due to the “extraordinary external factors” affecting the first half.

“Online sales, excluding sales by EziBuy, contributed 10% of total Group revenue, validating the Group’s decision to increase investment in its digital strategy to deliver ongoing growth.” directors said in Tuesday’s statement.

The shares ended down more than 17% at $1.87 after being off more than 20% at one stage.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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