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FJ Benjamin's 1Q losses narrow; launches rights cum warrants issue

Samantha Chiew
Samantha Chiew • 3 min read
FJ Benjamin's 1Q losses narrow; launches rights cum warrants issue
SINGAPORE (Oct 23): FJ Benjamin says it is on the cusp of a recovery following three years of intense restructuring.
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SINGAPORE (Oct 23): FJ Benjamin says it is on the cusp of a recovery following three years of intense restructuring.

Losses for 1Q18 ended Sept narrowed 74% to $942,000 from losses of $3.6 million in 1Q17.

The fashion and lifestyle group has also announced a rights cum warrants issue to raise up to $39 million.

Group turnover for 1Q18 fell 19% to $41.4 million compared to $51.3 million last year in the previous corresponding quarter as loss-making brands were discontinued.

After currency effects and excluding discontinued brands, group revenue in Singapore and Malaysia rose $4.9 million or 18% and revenue from the group’s fashion and timepiece business in Southeast Asia increased 18% and 17% respectively on comparable store growth and contributions from new stores.

Gross margins improved to 44% from 41% while group operating expenses fell 16% due to tight cost controls and closure of non-performing stores.

In a separate filing, FJ Benjamin is proposing to raise about $12 million through the issue of 341.2 million new shares at 3.5 cents each on the basis of three rights shares for every five existing shares.

Net proceeds from the rights issue will go towards supporting the group’s expansion plans and general corporate purposes, including general working capital, funding new projects, capital improvements and making strategic investments and/or acquisitions.

Moreover, it is proposing to issue two free warrants for each rights share.

The warrants, with a three-year exercise period, will have an exercise price of 4 cents per warrant. If fully exercised, it will raise another $27 million.

The rights are priced at a discount of 22.2% to the group’s last traded price of 4.5 cents per share on Oct 17, being the last full trading day of the shares immediately preceding this announcement; and 15.15% to the theoretical ex-rights price of 4.13 cents per share.

The company’s three major shareholders – the controlling Benjamin family, businessman Peter Lim and Raffles Investments – have agreed to subscribe in full to their rights entitlements.

In addition, the Benjamin family and Lim will take up all excess rights shares not taken up by minority shareholders.

Meanwhile, as a demonstration of its commitment, senior management has taken a 70% pay cut to help further accelerate the group’s recovery, 40% effective immediately in addition to an earlier 30% pay reduction.

Nash Benjamin, group CEO says, “Going forward, the group’s resources and management time will be focused on expanding organically as well as through the acquisition of new brands and businesses to accelerate profitability for the Group at a time where the consumption landscape is evolving.”

Shares in FJ Benjamin closed as 4.5 cents on Monday.

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