Dizz Group has issued a right of reply following Lovin Malta’s report on the group’s latest financial accounts which registered a loss of €3.3 million for the year 2020 amid the COVID-19 pandemic.

Their reply reads as follows:

Whilst the article published referred to various figures extracted from the Dizz Group of Companies Ltd’s audited consolidated financial statements for year ended 31st December 2020, such were incorrectly and maliciously captured in the said article with a clear distortion of the factual figures and a highly misleading conclusion of the Group’s performance and financial position. These unprecedented times have brought along with them challenges to many businesses spanning different industries, and Dizz Group, like many others, is no exception. This notwithstanding, LovinMalta intentionally singled out our Group and continued in its defamatory campaign against us. We have a responsibility towards our business partners, our employees and our bondholders to ensure that our group’s performance and financial position is not being misrepresented. We thus feel it necessary to address and clarify the following incorrect statements:

1.Independent Auditors’ Report – No Qualifications

Reference to the phrase ‘an uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern’ is taken out of context with the result that it misrepresents the auditors’ assessment in respect of the financial situation of the Dizz Group. Such phrase is reported under the section titled ‘Emphasis of Matter’ which section is intended to draw attention to the impact COVID-19 had on the operations of Dizz Group given that the retail and catering industries were negatively impacted. An Emphasis of Matter is not, and should not be considered as a qualification. Indeed, the auditors have not qualified their opinion and, as they have expressly stipulated in the said audited consolidated financial statements, their opinion remained unmodified thereby meaning that they were satisfied with the directors’ assessment that Dizz Group can adopt the going concern basis in preparing the financial statements since it has adequate resources to continue in operational existence for the foreseeable future. This is an important part which LovinMalta omitted from their article, thereby leading its readers to possibly wrongly conclude that the financial statements had been qualified by the auditors. 

2.2019 – Total comprehensive income of € 1.2 million 

It was reported that the Dizz Group recorded a loss of €2.3 million as at 31st December 2019 on a consolidated basis. Figures cannot be seen in a vacuum and must be read and interpreted in their context. Whilst for financial year 2019, Dizz Group recorded a consolidated loss after tax of €1.7 million, following a revaluation of the investment property recorded in the other comprehensive income, Dizz Group recorded a profit of €1.2 million on a consolidated basis.

3.Regulatory Requirements – Sinking Fund

The article highlights that the Group refused to answer questions about whether a sinking fund had been put in place “to ensure the company would be able to pay back the bond interest”. This statement clearly demonstrates the author’s lack of understanding on the matter he chose to write about as no regulatory authority would impose an obligation to set up a sinking fund to ensure the repayment of the “bond interest”. Responsible journalism requires one to research and analyse a matter thoroughly prior to it being published. Thus, it is legitimate to conclude that the scope behind such reference was not informative but rather malicious and aimed at serving the author’s own agenda. We thus feel it is necessary to clarify that in terms of the prospectus published by Dizz Finance p.l.c. on 20 September 2016 as well as in terms of the Notes Programme published by D Foods Finance p.l.c., neither company is obliged to put in place a sinking fund. Conversely, as per clause 22.24 of the Company Admission Document published by D Shopping Malls p.l.c. on 27 September 2018, D Shopping Malls p.l.c. is required to put in place a sinking fund equivalent to the principal amount of the bond (and not to ensure the payment of the bond interest), which is built up gradually from financial year 2024 onwards.

4.Positive Cash-Flow

Dizz Group’s cash at bank, on a consolidated basis, amounted to a positive balance of €902,000 and thus, to the contrary of what was reported by LovinMalta, was not in the negative. The figure reported in the article reflected a netted-off balance of the cash-at-bank and overdraft balance but failed to explain same, thus misleading its readers on the current cash-flow position.

5.Incorrect Reporting of Current Liabilities

The statement that Dizz Group of Companies Ltd’s current liabilities, on a consolidated basis, totalled €54 million is incorrect. As is clearly reflected in its audited financial statements, the current liabilities as at 31st December 2020 stood at €12.5 million. The Group further clarifies that the increase in total liabilities is principally due to the impact of IFRS 16, Leases, which became mandatory on 1 January 2019. As a result of the adoption of the new accounting standard, as of financial year ending 31 December 2019, the Group’s assets and liabilities increased with a corresponding amount of €22 million (in previous years all leases were accounted for as operating leases in line with IAS 17 and therefore had no impact on the statement of financial position).

6.Secured Convertible Bonds

The article refers to the Group issuing a € 10 million convertible notes programme to acquire shares in the Group’s food subsidiaries, D Foods Finance p.l.c. It is important to clarify that on the 21st of July 2020, D Foods Finance p.l.c. issued a base programme for the issue of up to €10,000,000 3% Secured Convertible Notes having a nominal value of Euro 100,000 each. On 3rd of August 2020, the first tranche of notes for Eur 3,000,000 were fully subscribed. As no further tranches were issued since then, the debt currently in issue by D Foods Finance p.l.c. amounts to €3 million and not €10 million.  It is also significant to note that the notes issued include a convertibility feature which would convert the debt into equity.