News Shorts: Kogan Flying, Qantas SPP Falls Flat, Sigma Slims Down

Another solid update from e-tailer Kogan, with the company reporting a 160% rise in gross profit for the month of July when compared to last year as the COVID-19 pandemic keep people shopping online.

Kogan said active customers increased by 126,000 to 2.3 million, with the rate of growth higher since June.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) rose on the preceding month to $10 million for July compared to $7.9 million in June.

Gross sales were up 110% on the prior year, the company said.

Kogan shares jumped 9.8% to $20.66.

Qantas investors have given the airline the biggest thumbs down imaginable in rejecting help the company boost its liquidity.

Qantas said on Monday that shareholders had paid up $71 million of the $500 million in new stock on offer.

That’s just over 3% of what shareholders were offered.

Qantas said on Monday that 8,660 investors, or around 5% of eligible shareholders, took up the offer with an average application amount of $8,200. It will issue 22.5 million new shares.
The airline announced the raising of up to $500 million on June 25 in tandem with the successful $1.3 billion institutional placing.

The offer price of $3.65 was a 13% discount from its last trading price of $4.19. But with Qantas’ shares falling to as low as $3.20 last week ahead of the offer closing on August 5, the offer price reverted to a 2.5% discount to its five-day volume-weighted average price, or $3.18 per share.

The stock rose last week to close at $3.32 on Friday. On Monday they jumped a further 3.3% to $3.43.

Sigma Healthcare has sold and leased back two of its Distribution Centres (DC’s) for $172 million, half the number of centres in the original deal.

Sigma said that while the original transaction contemplated a part sale of four DC’s, the final deal will see the full sale of the land and buildings at Kemps Creek in New South Wales and Berrinba in Queensland.

“The proceeds are well above the original investment cost, and the gain will be offset by the utilisation of existing capital tax losses,” Sigma said on Monday.

Sigma said it will retain ownership of its newly constructed Distribution Centre in Canning Vale in Western Australia, and Truganina in Victoria, which is currently under construction, as well as the critical automation across all sites.

As part of the agreement, Sigma said it had entered into a 15-year lease agreement with two five-year options to extend, with first year lease cost around $8.0 million annualised.

Sigma CEO Mark Hooper said in yesterday’s statement that “This is a great outcome for Sigma shareholders. Owning and managing the construction phase gave us control over the build and created value for shareholders.”

“By completing this transaction, we benefit from LOGOS as the owner and manager of our tenancies at Kemps Creek and Berrinba, while capturing the latent value that was not previously recognised on Sigma’s balance sheet.”

The company said the proceeds from the deal will reduce its net debt to below $100 million.

“This puts Sigma in a great position. We have restructured our business to deliver a more efficient base, renewed our Distribution Centre Network to arguably be the best in the industry, and are well advanced in upgrading our entire IT infrastructure. At the same time, we have retained balance sheet strength and flexibility to drive the business forward, Mr Hooper concluded.”

Sigma’s shares rose 32.2% to 68 cents.

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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