Ordinary shares across Australian fashion company Mosaic Brands has been placed into a compulsory trading suspension today after failing to meet a reporting deadline.
The business was expected to lodge and release its FY24 appendix 4E and audited financial report by August 31 but issued a statement on Friday saying the group needs more time.
“In the process of completing the results, the group has determined that more time is needed to resolve a number of matters prior to finalisation of the results,” Mosaic Brands reported.
“The group expects to be in a position to lodge its appendix 4E and audited annual financial report by no later than 30 September 2024.”
As a result, Mosaic's ordinary shares (ASX:MOZ) and its convertible notes (ASX:MOZG) were placed into a compulsory trading suspension from today - Monday, September 2 - due to the non-lodgement of its FY24 appendix 4E and annual financial report by the required date.
“During this period, Mosaic also intends to consult and work with all relevant stakeholders to accelerate a strategy to re-align its operations to be more reflective of current and anticipated market dynamics.
“The group expects this consultation process to be undertaken as quickly as practically possible and currently anticipates that it will be able to provide an update to the market along with its FY24 annual results, by Monday, September 30, 2024. Mosaic is working constructively with its senior lender through this period.”
It comes a month after Mosiac Brands issued a trading halt following media reports that the business entered safe harbour arrangements, around the same time when the Noni B and Rivers parent company confirmed a trading a statutory loss for FY24 amid operational issues.
As reported by Ragtrader earlier this month, Mosaic anticipates a $5 million to $10 million loss in operating earnings before interest, tax, depreciation and amortisation and an operating profit loss (EBIT) in the range of $15 million to $20 million.
According to the company, the operational issues shared in its recent trading update continued to impact the group for the balance of FY24. This includes a logistical overhaul, where the business migrated to a fully integrated logistical supply chain and distribution system with a newly appointed global partner.
“The resulting working capital pressures caused by these operational issues, and their consequential impact on stock intake and trade, are being actively managed by Mosaic, working closely with the support of its major lenders,” Mosaic reported last week.
“While the FY2024 accounts continue to be finalised in advance of the full-year announcement later next month, the group confirms it will report a trading and statutory loss for FY2024.
“The group continues to anticipate a recovery in the first half of FY2025 as it works through and resolves the above issues.”
Alongside operating profit challenges, Mosaic’s net cash inflows were around $6.6 million in the latest quarter compared to approximately $19.8 million outflows in the previous quarter.
Mosaic noted that the seasonality of fashion purchasing in retail, typically the end of each of the March and September quarters, delivers net cash outflows and the December and June quarters deliver net cash inflows.
Mosaic Brands operates a network of circa 700 stores and a number of online digital department platforms.
Mosaic is not the only ASX-listed business that missed reporting deadlines this year, with the ASX also suspending shareholding for five other entities including Austral Gold Limited and The Star Entertainment Group.