KUALA LUMPUR (Aug 27): Padini Holdings Bhd (KL:PADINI) on Tuesday proposed to undertake a bonus issue of up to 328.95 million shares on the basis of one bonus share for every two existing shares held to reward shareholders, as it announced that its fourth quarter profit has more than halved year on year.

As at July 31, the homegrown fashion retailer has an issued share capital of RM69.56 million comprising 657.91 million shares.

In a stock exchange filing, Padini said its share price adjusted for the bonus issue shall not be less than 50 sen, based on the daily volume-weighted average market price (VWAMP) for the three-month period before the application date, to comply with Bursa's listing requirements.

The theoretical ex-bonus price for the group's shares after the proposed bonus issue is expected to be between RM2.2585 based on the lowest daily VWAMP during the three-month period and RM2.2738 based on the five-day VWAMP up to July 31.

A large chunk of Padini’s shares are held by managing director Yong Pang Chaun through his private vehicle, Yong Pang Chaun Holdings Sdn Bhd — the single largest shareholder with 43.74% equity interest, Bloomberg data showed.

It expects the bonus issuance to be completed by the fourth quarter of this year, on obtaining the relevant approvals.

Separately, the group said its net profit for the fourth quarter ended June 30, 2024 (4QFY2024) dropped 54.09% to RM26.31 million from RM57.31 million, following a decline in gross profit margin amid rising staff costs, and a dip in revenue.

Revenue for 4QFY2024 fell 4.44% to RM455.17 million from RM476.33 million in 4QFY2023 due to lower outlet sales, with same store sales growth falling 10.7%.

It declared a first interim dividend of 2.5 sen per share for FY2025 to be paid on Sept 27. The group paid an annual dividend of 11.5 sen per share to shareholders in both FY2024 and FY2023.

For the full FY2024, the group’s net profit dropped 34.17% to RM146.6 million from RM222.69 million, although revenue rose 5.31% to RM1.92 billion from RM1.82 billion.

Padini said the retail business remains challenging due to the deterioration of purchasing power arising potentially from rising costs, trade tensions and rising inflation and interest rates.

“Despite these potential challenges, we are optimistic that the group will perform satisfactorily for the current financial year. Management will continue to provide value for money products and implement measures to control costs, optimise working capital, preserve cash and streamline the operations to minimise any adverse impacts,” it added.

On Tuesday, Padini shares closed 10 sen or 2.96% lower at RM3.28, giving it a market value of RM2.16 billion.