Surfstitch Group Ltd Revised the EBITDA projection
Revised the EBITDA projection: Surfstitch Group Ltd (ASX: SRF) stock surged over 10.34% on March 20, 2017 driven by some improving sentiments. SRF in the 1H 17 has reported a loss from continuing operations of $5.6m, which is an $8.0m improvement to the prior corresponding period (pcp) loss of $13.6m. The revenue was 13.1% below the pcp (4.3% down in constant currency) attributed to both the +20% appreciation of the AUD to GBP and a decline in sales in the North American market. Moreover, the Underlying EBITDA loss reduced from ($6.1m) to ($1.3m). There was $4.8 million reduction in expenses and capex in the 1H 17 and more than 50% run rate savings from the US restructure from November 2016. However, SRF has revised the underlying EBITDA loss projection from the previous range of ($4.0m) – ($5.0m) to an underlying EBITDA loss forecast range of ($5.0m) – ($6.5m) owing to trading headwinds witnessed in last weeks of December and into January and February. The cost control initiatives have mitigated some of the impact of these difficult trading conditions and would continue to be carefully managed to deliver on underlying EBITDA closer to the lower end of the updated forecast range.
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