For much of the past 10 days or so, ASX investors were on holidays. This was despite the market being open for trading on a handful of days, 3 between Christmas and New Year as well as every day this week except Monday (New Years’ Day).
If you were on holidays, you likely missed some bad news out of a handful of companies. With investors on holidays, the impact to a company’s share price may not be as significant – at least until investors get back from holidays. At the same time, the consequences to the company may not necessarily wait to hit the company until the Christmas/New Year period is over. We’ve keep our eye on the market throughout the holiday season and have compiled a wrap of all the bad news released to the market during the period.
Here’s the bad news that dropped while ASX investors were on holidays
Discovery Alaska (ASX:DAF)
Discovery Alaska was focused on the Chultina Project in Alaska and the Mia Adjacent Project in Quebec. That is, until recently. The company told investors it relinquished 284 tenements in the former project, reducing its area to a total of 24 claims, in order to minimise tenant renewal fees, maintenance and exploration costs. As for the latter project, it told investors it was not proceeding – thankfully prior to incurring costs or penalties.
So what now? ‘The company is working to identify and review additional new projects that may complement the company’s current activities’.
CTI Logistics (ASX:CLX)
Right after the market closed on the Friday before Christmas, this logistics company advised investors that its profit for the first half of FY24 (1HY24) would be 30% lower than the prior corresponding period. Margins were squeezed during the reporting period as customer supply chains normalised and customers consequently were less willing to pay for ‘premium’ freight services, not to mention supply-side inflationary costs such as wages, property and insurance. CTI also warned investors its profit for the second half of FY24 could be hit as well.
Credit Intelligence (ASX:CI1)
There was another profit warning here too. The debt collection company recorded a net profit of $0.3m in 1HY24, but has an unaudited loss of $0.52m – a 273% decrease. It also warned investors to brace for an impairment on the carrying amounts of goodwill in some of its subsidiaries.
Collins Foods (ASX:CKF)
A week prior to Christmas, the KFC franchisor told investors that a class action had been filed against the company, alleging certain employees were not provided with paid 10 minute rest breaks.
Two days after Christmas, a competing claim was filed by another law firm, raising the same claims.
Happy Valley Nutrition (ASX:HVM)
This company was a dairy company that had been planning to build a dairy factory in New Zealand’s Waikato region, although it couldn’t complete the project due to funding requirements. It went into administration in the middle of the year, owing creditors $24m. During the holidays, the company was finally removed from the bourse.
This news wasn’t necessarily bad, although it does paint a bad picture for the company. It entered into an agreement for a S$1m bridging loan, ‘for working capital and general corporate purposes’. It is just to keep the lights on. The loan comes with upfront interest of S$90,000, not to mention an administrative fee of S$60,000 as well as S$15,000 in legal costs and expense. The interest gradual rises over time, at 3% in the first 3 months, then 4% in the fourth, 5% in the fifth and following months.
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