Praktiker in the red

The stock market has reacted with shock to the figures presented by the German Praktiker group of companies for the recently completed financial year. These reveal an annual deficit to the tune of € 554.7 mio for the DIY retailer in 2011. What led to the deficit, which amounts to more than one-sixth of turnover, was above all the depreciation of assets and goodwill, as well as the cost of restructuring the group. The operational deficit came to € 61.6 mio in EBIT before special items.Maseltov, an Austrian investment trust that is Praktiker’s major shareholder with a stake in excess of ten per cent, spoke in favour of breaking up the company in an interview with the Financial Times Germany. That would entail selling the group’s East European business, which would bring in between € 50 mio and € 70 mio. A further € 120 mio could be raised through convertible loan stock, according to Maseltov.