Auditors flag concerns about Dizz Group’s finances
The group issued over €17 million worth of bonds to the public via its subsidiaries
Dizz Group’s auditors have flagged concerns about the company’s tight financial situation.
The group operates a wide network of fashion outlets and food and beverage establishments, representing brands like Nespresso, Caffè Pascucci, Michael Kors and Terranova.
It has issued over €17 million worth of bonds to the public via its subsidiaries.
While signing off on the group’s accounts without qualifications, its auditors CLA Malta flagged a “material uncertainty” that may cast significant doubt on the company’s ability to continue as a going concern.
The group reported a loss of €2.69 million last year, which it says was also the result of high depreciation and lease charges.
“The group’s liquidity position continues to be tight. Nevertheless, the directors have taken active steps to address this through refinancing efforts, lease restructuring and cost optimisation. These initiatives are currently ongoing,” Dizz Group said in its 2024 annual report.
Directors Diane and Karl Izzo acknowledged in the report that should these cash flow and refinancing plans not materialise within a reasonable time frame, the group may be unable to meet its obligations as they fall due.
Its debt obligations include repayment of an unsecured €8 million bond next year by its financing arm Dizz Finance.
By the time the group’s financial statements were approved in April, discussions with financial institutions had not yet resulted in binding agreements, the annual report says.
Asked by Times of Malta for an update about these financing discussions, Diane Izzo said the company is positive about the refinancing of its debts and is in regular contact with the Malta Financial Services Authority.
Izzo said Dizz Group reassures bondholders “beyond any speculation” that the repayment of the bond will take place as scheduled next year.
She explained how after a “tough period” resulting from the knock-on effect of the COVID-19 pandemic, Dizz Group embarked on a recovery strategy, bringing new successful brands to the market and consolidating its position as a leader in a number of retail sectors.
“This in spite of increasing competition, both domestically and online, and rising costs,” Izzo said.
“As we have been committed over the past years, we shall continue to support the business until it repays all of its obligations to third parties,” Izzo said.