Godfreys shares are getting a hammered

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Shares in Godfreys Group took a hit after the vacuum cleaner chain store reported weak sales, a sharp drop in earnings and foreshadowed a loss for the half year to December.

At the close, the shares were down 16.8% to $0.32.

Godfreys, known for its loud television advertisments where a vacuum cleaner sucks up a bowling ball, floated on the ASX in 2014 at $2.75 a share.

In a trading update based on unaudited financial results for the half year to December, the company says like-for-like sales during October and November 2017 were volatile and weaker than expected. Christmas trading was also weaker than expected.

Unaudited like-for-like sales for the half year were 6.2% lower.

The underlying EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) result was expected to come in at $3.6 million, down from $6.3 million in the same period last year.

And the company plans a non-cash impairment of goodwill and intangibles of $75 million before tax which would mean a net loss after tax of around $59 million.

The unaudited results include a positive free cash flow result and continued reduction in net debt to $16.2 million, down from $18.3 million in the previous corresponding period and down from $16.5 million in June last year.

The company will re-set the outlook for underlying 2018 financial year earnings when new CEO Jason Gowie releases half-year results on February 20.

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