Bega Cheese Ltd (ASX:BGA) shares slid into a trading halt today after it was revealed the company might take a prior-year hit in the form of an impairment charge.
For context, the broader Australian share market or S&P/ASX 200 (ASX: XJO) was trading at 6650.4, down 0.86%.
Who is Bega Cheese?
Bega is one of Australia’s largest dairy businesses and has been producing dairy products since 1900. These days it usually sells more than 1 million packs of cheese a day across a variety of brands. Its brands includes Bega, Vegemite, ZoOSh and Dairymont. It also owns Tatura, a producer of infant formula and cream cheese.
Video: trading halt’s explained
In the Rask video above, Owen explains trading halts, including what to expect when your company enters one. You can subscribe (free) to Rask’s YouTube channel by clicking here.
What’s Going On?
Bega Cheese was due to report its 2020 half-year financial report this morning but seems to have pulled the pin at the last minute.
According to an ASX release today, the company’s trading halt is self-imposed on account of finalising its financial accounts.
The company said it has, “identified that prior to the final implementation of the new ERP system, data errors resulted in a misstatement that may require a prior year adjustment.”
Obviously the company can’t present incomplete or inaccurate statements to the market.
While investors and analysts loathe uncertainty, there appear to be three pieces of reassuring news for Bega shareholders:
- Bega does not expect any impact on current year (2020) financial results
- On that, the company reaffirmed its FY20 “normalised” EBITDA guidance of between $95 million and $105 million
- Finally, the company expects to release its financial statements tomorrow, February 28th, 2020.
Until then, we’ll all just have to wait patiently.
Bega Cheese shares were last seen trading at $4.05, giving the company a market capitalisation more than $800 million.
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