Story-i Faces Deepening Crisis Amid Receivership and AUD 1.29M Net Asset Deficit
Story-i Limited reported a significant AUD 24.17 million loss for FY2024, driven by the receivership and liquidation of its Indonesian Apple reseller business. The company is now focused on recapitalisation and securing new investments to revive operations.
- AUD 24.17 million net loss for FY2024
- Receivership and liquidation of Indonesian Apple reseller business
- Continuing operations loss of AUD 0.52 million
- Net tangible asset deficit of AUD 1.29 million
- Post-balance date convertible notes raise of AUD 200,000
Financial Results and Business Challenges
Story-i Limited (ASX – SRY) has released its preliminary financial results for the year ended 30 June 2024, revealing a net loss of AUD 24.17 million. This steep loss was predominantly due to discontinued operations following the receivership of its Indonesian Apple reseller subsidiary, PT Inetindo Infocom. The Group’s continuing operations also recorded a loss of AUD 0.52 million, underscoring ongoing operational challenges.
The Indonesian business, which operated 23 stores across 10 cities, faced sustained headwinds including weak consumer sentiment post-pandemic, low margins, and rising funding costs amid interest rate hikes. After a failed attempt to sell the business to NextGen Retail Inc. and unsuccessful negotiations with other buyers, the Board resolved to place the business into receivership and initiate a liquidation process expected to span up to two years.
Balance Sheet Impact and Auditor Concerns
The Group’s net assets declined to a deficit of AUD 1.29 million, reflecting the deconsolidation of PT Inetindo Infocom and the associated write-downs. Working capital remains in deficit by the same amount. Cash reserves have dwindled to just AUD 20,736 as at 30 June 2024, down from AUD 2.44 million the previous year.
Compounding investor uncertainty, the independent auditor issued a disclaimer of opinion citing insufficient audit evidence related to the discontinued operations and the financial position of the receivership business. This disclaimer highlights the challenges in verifying the Group’s financials amid the ongoing liquidation and operational disruptions.
Strategic Response and Future Outlook
In response to these difficulties, Story-i is actively pursuing recapitalisation and new investment opportunities. Post-balance date, the Company raised AUD 200,000 through convertible notes, with further fundraising plans underway. The Board is focused on securing a new principal undertaking to satisfy ASX listing requirements and to facilitate the resumption of trading, as the Company remains suspended pending these developments.
Governance changes have also taken place, with former Executive Director Michael Chan resigning and Kam Leong Chan appointed as a Non-Executive Director in September 2024. The Board continues to monitor risks related to securing new investments and regulatory compliance amid a challenging market environment.
Investor Considerations
While the liquidation of the Indonesian business marks a significant turning point, the Group’s survival hinges on successful recapitalisation and strategic repositioning. The extended liquidation timeline and auditor’s disclaimer introduce material uncertainties that investors should weigh carefully. The Company’s ability to attract new capital and identify viable business opportunities will be critical in shaping its future trajectory.
Bottom Line?
Story-i’s path forward depends on securing fresh capital and new ventures amid ongoing liquidation and audit uncertainties.
Questions in the middle?
- What progress is Story-i making in securing a new principal undertaking to end its ASX suspension?
- How will the liquidation timeline of up to two years impact the Group’s financial stability and investor confidence?
- What are the implications of the auditor’s disclaimer on the reliability of the Group’s reported financials?
