Parkson Retail's independent auditor raises going concern doubts

PARKSON Retail Asia's independent auditor has raised a "material uncertainty" about the department store operator's ability to remain as a going concern, the company announced on Monday.

However, Parkson added: "The board wishes to inform that the group has received undertaking from (ultimate holding company) Parkson Holdings Berhad to provide continued financial support for a period of 12 months from the date of the board's approval of the audited financial statements." It also pointed out that the auditors' report for the previous financial year ended 30 June 2018 contained a similar emphasis of matter.

Auditor Ernst & Young highlighted that for the year ended 30 June 2019, Parkson had incurred a net loss of S$34.61 million while its current liabilities exceeded its current assets by S$61.33 million.  The company said it will be issuing its full annual report in "due course", which will contain the audited financial statements and the independent auditor's report. Parkson's next annual general meeting will be held this month.

In a separate filing to the Singapore Exchange (SGX) on Monday, Parkson flagged that it had racked up consecutive pre-tax losses for the three most recently completed financial years. In addition, its latest six-month average daily market cap is S$17.72 million, below the S$40 million threshold. 

Shares in Parkson, which is on the SGX's watch-list, last traded at S$0.021 on Friday.