Big Food Group rules out rights issue
Wednesday ruled out a rights issue but warned that the costs of a
£375m (E607.9m) spending plan would weigh on profits in future
years, the Financial Times reports.
UK company the Big Food Group, the recently renamed Iceland, on Wednesday ruled out a rights issue but warned that the costs of a £375m (E607.9m) spending plan would weigh on profits in future years, the Financial Times reports.
Analysts slashed profit forecasts for the food retailer and wholesaler and the shares fell 13 ¼p to 116p.
When former chairman Malcolm Walker sold shares in December 2000, a few weeks before the first profit warning, they stood at 339p. Bill Grimsey, chief executive, and Bill Hoskins, finance director, each bought 100,000 shares on Wednesday at 120p.
Although relieved by the lack of a rights issue, analysts were disappointed that trading was still poor in the Iceland chain, and by the extra costs that the group predicted.
Grimsey, who joined in January last year, said: "Shareholders have seen half their value wiped out. My job is to restore value. It is an enormous task."
He said investors should judge the performance starting from now, with a new management team, a new strategy and new plans for a refinancing in place. "That is why we changed the name last week," he said.
Grimsey outlined the costs of the strategy to revitalise the business that had been set out last November.