FUNTASTIC (ASX: FUN) ANNOUNCES SALE OF CONFECTIONERY BUSINESS
Following the successful acquisition of the Hobby Warehouse Group - which includes e-commerce businesses Toys”R”Us, Babies”R”Us and Hobby Warehouse, Funtastic Limited (ASX: FUN) today announced the sale of its Confectionery Business to Sweet Season Pty Ltd.
This sale is in line with the strategic intent to transform the business by overhauling existing portfolios; introducing new products and expanding its e-commerce focus; and exploring inorganic growth opportunities in emerging growth sectors.
The key points and the financial impact of the transaction are as follows:
- Acquirer: Sweet Season Pty Ltd.
- Sale Price: $1.05m comprising current inventory and all other assets of the Confectionery Business including confectionery brand names and other intellectual property. Adjustments to the sale price will be made in accordance with inbound inventory and customer sales.
- Business Description: The sale of candy, lollies including fizzer packs, sour rolls, sour straps, and chocolate eggs as food items (but excludes distribution of products associated with food, for example Chill Factor and similar products).
- Revenue of the Confectionery Business for the year ended 31 July 2020: $4.2m which represents 17.1% of the FUN Audited Total Revenue for the year ended 31 July 2020 and approximately 8% of the pro forma full year revenue of the new FUN group post acquisition of the Hobby Warehouse Group.
- Net Assets of the Confectionery Business as of 31 July 2020 amounted to $195,000 which represents 4% of the FUN Total Assets on 31 July 2020 and 1.4% of the pro forma total assets of the new FUN group post the acquisition of the Hobby Warehouse Group.
“The sale of the confectionery business is part of the ongoing strategic review of all product ranges, customer segments and operations. It accelerates materialisation of value for part of the business and will allow investment to build scale and to right-size the business, aligned with the planned growth and focus of the company to deliver our mission of encouraging children to engage with as many forms of play as possible and assist people to explore, create and live life more fully,” said Louis Mittoni, CEO and Managing Director of Funtastic.