Silver Chef still in talks with ASIC, downgrades guidance
Food & Agriculture
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Catering equipment finance provider Silver Chef has downgraded its pre-tax profit guidance for its hospitality business from $24 million to as low as $17 million but says it has renewed its focus to a single, stronger brand identity.
Silver Chef provides financing for businesses, largely in the hospitality space, to rent or purchase commercial kitchen equipment and other materials.
The company (ASX:SIV) also updated shareholders ahead of its August results that it has been “working through an issue that has arisen with ASIC” relating to commercial contracts that had been issued by its discontinued GoGetta business.
In a statement to investors, the company said some of these light commercial contracts were “alleged by the regulator as constituting consumer lending without an appropriate licence”.
These contracts relate to the purchases of sedans, wagons and SUVs originated by third party finance brokers.
“Silver Chef has commissioned EY to undertake an extensive review of all contracts and the GoGetta internal processes,” the company said in a statement.
The company says discussions with ASIC are expected to “straddle the end of year period”, so the impact they may have on the company’s 2018 accounts is unknown.
In February, it announced it was exiting its GoGetta equipment financing business over the following 12 to 18 months, preferring to return focus to the hospitality goods space exclusively.
“With renewed focus on the back of the One Brand, One Industry strategy, the group will begin to realise the significant opportunities inherent in the global hospitality market,” the company said in an update today.
The company’s share price has dropped 50 per cent over the past 12 months, from $7.90 to $3.25c.