GNS yesterday issued a statement to shareholders:
Dear Shareholder,
I just wanted to report on progress at GNS.
As you know without Cash & Carry, our warehouse needs are considerably reduced. Recognising that we have just sold our Melbourne warehouse (10,000 sqm) and will be moving to a new modern facility (of 3,900 sqm). Similarly, we will be moving out of our Sydney warehouse at Padstow to a smaller modern warehouse with the timing yet to be finalised.
The 16/17 year just finished was – as you are aware – a very tough year. While we were still in profit we had to sell Padstow and refinance the business. Our service levels have now been restored and our inventory is now under much tighter control. As part of the more disciplined approach to stock levels we have had to recognise overstocking and took a $2m stock writedown. Unfortunately this resulted in a drop in share price, such price will be finalised shortly as our auditors complete their work.
As the start of rewarding our patient shareholders we have declared a dividend – GNS’ first – of 9% of paid up capital. The record date for payment is 2 December 2017.
Also from time to time, customers have requested access to their levies and we have been endeavouring to find a way without endangering the company’s cashflow and working capital needs. So in the next two months, provided ASIC clears it, an offer will go levyholders to take up half their levy in GNS shares and the other half as trading credit.
Last year GNS made two acquisitions – WA Stationers and V Wholesale and we continue to consider market opportunities to build a greater resilience for the business.
Our new senior management team has settled in well, recognising the changes that were needed and implementing solutions. It has also signalled a return to state based management and customer focus.
And to cap off a period of very considerable change, we will be presenting a number of Constitutional changes to shareholders at our 2017 Annual General Meeting. These changes being recommended will be detailed in the AGM papers but aim to recognise the changed market environment, freeing up outdated ownership restrictions.
Thank you for your patience and loyalty as we reassert our place in the market.
Yours faithfully,
Martin Hartcher
Chairman
GNS Ltd
Story so far :
– cannot pay levy holders but can make dividends
– cannot raise capital so convert levy funds instead
– sell freehold assets and replace with leasehold
– accountants still to determine effect of stock w/offs
– was trading profitably, refinanced, now loss making
Certainly a Company on the move
what a great management!!! not
if i run a tny business the way you run, i would have sold my house too
Selling off assets taking over competitors you would think in that case they would need more space and not less. The Board consists of a OLD BOYS CLUB who do not know what is going on in the industry. Meetings are organized at times when most Newsagents/Shareholders are working, like the last open day at the warehouse on a Friday. I think it is time to call an extraordinary Shareholders meeting and have some serious questions answered.
They terminated the services of a long serving Auditors with the new ones charging more than double of the previous year why?
I wonder if management have salaries that include shares? …hence the payment of a dividend!