Brick Group suspends distributions, units hit record low
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Hey there, time traveller!
This article was published 19/02/2009 (6153 days ago), so information in it may no longer be current.
EDMONTON – A suspension of monthly distributions by The Brick Group Income Fund (TSX:BRK.UN), one of Canada’s largest furniture retailers, led to a nearly 40 per cent plunge Thursday in the fund’s equity.
Brick’s publicly traded units fell by as much as $1.35 in the first hour of trading Thursday, after the Edmonton-based company announced its already-reduced monthly distributions would be halted.
In later trading, Brick units fell $1.05 to close at $1.60 on the TSX, a drop of 39.6 per cent. Earlier, The Brick’s unit price fell to as low as $1.30, a record since the retailer went public in 2004.
The fund had said in November that it was reducing the monthly cash payouts to unitholders to five cents from 10 cents per unit as a precaution and in anticipation of a slowdown in consumer spending.
On Wednesday, Brick president and CEO Kim Yost said the company remains confident in the fundamentals of the business but “management and the board of trustees believe it is prudent to act now to preserve cash.”
The fund said late Wednesday that the monthly cash distribution of five cents per unit declared on Jan. 21 was paid on Monday and would further distributions had been suspended indefinitely.
Although the Brick has not yet finalized its fourth quarter and 2008 financial statements, the fund said Thursday that preliminary unaudited results suggest that on a year-to-date basis same store sales fell by 3.6 per cent.
Adjusted earnings before interest, taxes, depreciation and amoritization for the year, before any potential impairment charges, is expected to be $75 million, down 16.5 per cent from 2007.
The Brick Group sells household furniture, mattresses, appliances and home electronics, operating under four principal banners: the Brick, United Furniture Warehouse, the Brick Superstore and the Brick Mattress Store.