Hamashbir seeks strategic investor

Rami Shavit Photo: PR

After the sale of New-Pharm, the company plans to focus on three core activities.

One month after the New-Pharm deal, Hamashbir 365 Holdings Ltd. (TASE:MSAH) controlling shareholder and CEO Rami Shavit is setting his future goals, including delisting the holding company from the TASE, focusing on core activities, and finding a strategic investor to be a partner in the company.

Hamashbir 365 is now saying that following the sale of New-Pharm to Supersol, the company's debt to its bondholders is NIS 115 million, the same amount as its cash and marketable securities. The value of Hamashbir 365, whose market cap is NIS 225 million, has fallen steeply in recent years from its peak of NIS 766 million.

According to Hamashbir 365's report, it will now retain only three core activities: all the shares in Hamashbir Department Stores, which has 37 outlets spread around Israel; half of Club 365 Finance, together with Nahum Bitan; and 67% of the shares in 365 Technologies.

The group states that its target for 2018-2019 is to recruit a strategic partner in Hamashbir 365 or in Hamashbir Department Stores in order to substantially improve the company's results. In a presentation published today, Hamashbir 365 predicted that it would reach NIS 1 billion in revenue in 2017.

Up until now, despite efforts at streamlining and focusing on development of its core business, the Hamashbir group has had difficulty in getting back on track. It finished the third quarter of 2017 with a NIS 22 million loss, compared with a nominal NIS 200,000 profit in the corresponding quarter of the preceding year.

Hamashbir 365's losses in the first three quarters of 2017 totaled NIS 32 million, 50% more than it lost in the corresponding period in 2016. These results are a continuance of the trend in previous years; the company posted losses of NIS 34 million in 2016 and NIS 4 million in 2015.

Actually, Hamashbir 365 has not posted a net profit in any year since 2011, except for 2013, when it posted a one-time capital gain on the sales of organizational catering company Cibus. Excluding this profit, which gave Hamashbir 365 a NIS 73 million profit in 2013, its losses between 2011 and the end of the third quarter of 2017 amounted to over NIS 150 million.

Most of the Hamashbir group's activity is currently in the Hamashbir Department Stores chain. It also operates a customers' club and has activity in the technology sector. Hamashbir 365 recently signed an agreement to sell its New-Pharm chain of pharmacies to the Shufersal supermarket chain for NIS 130 million. Later, at the demand of the Antitrust Authority director general, it was agreed that some of the chain's outlets would be sold to brothers Itzik and Sharon Nisanov for NIS 11 million.

Hamashbir 365 recent suffered another blow when the group's licensing agreement to operate the Intersport international sports retailer in Israel was canceled. The group reported that the agreement was canceled because of disagreement between the parties about the timetable and planned activity in Israel. Hamashabir 365 explained at the time that this cancelation was likely to improve the group's performance through a focus on its core business.

Published by Globes [online], Israel Business News - www.globes-online.com - on January 23, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Rami Shavit Photo: PR
Rami Shavit Photo: PR
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