Now it’s down to talks with Myer (ASX:MYR) as Solomon Lew’s Premier Investments goes cold on its demerger idea of spinning off its successful Smiggle and Peter Alexander chains.
The demerger idea—raised earlier this year in March (but rumoured before then)—has been “benched,” as the Financial Review put it, in favour of trying to do a deal with the associated company, Myer, on the second part of the breakup idea.
Myer revealed last Friday that it was in due diligence with Premier over a plan for the department store group to buy Premier’s “non-core” apparel group, consisting of the chains Jay Jays, Just Jeans, Dotti, Jacqui E, and Portmans.
Premier’s board stated it was prioritising the potential Myer deal but still “saw merit” in the previous demerger plans, hinting that if Myer bites and buys the poorly performing non-core brands, the Premier board may revisit the demerger idea.
The change of heart was revealed in the company’s full-year results, which were partially disclosed in a trading update earlier this month based on preliminary figures for the year ending July 31.
News of the about-face on the demerger of Smiggle and Peter Alexander caused Premier shares to lose more than 8%.
The actual full-year results were in line with the September 9 trading update.
Revenue for the year fell, as forecast, down 2.7% year on year to $1.62 billion. This resulted in the company’s retail EBIT dropping to $325.9 million, while net profit after tax was down 4.9% to $257.9 million.
Despite the weakness, the final dividend was boosted by 10 cents, or 16.7%, to 70 cents a share, for a total of $1.33 for the full year.