Consumer and automotive electronics products supplier Armour Group has raised £2m at 7p a share.
This will give Armour a stronger balance sheet and help the company invest in its Asian businesses and build up awareness of its brands. New three-year bank facilities were obtained with GE Capital at the end of 2010. This includes a £10m invoice discounting facility, £6m revolving loan facility and a £2m trade finance facility. Net debt of £3.7m is forecast for the end of August 2011.
The consumer electronics business is finding market conditions tough but the automotive electronics business is ahead of expectations. Overall margins have come under pressure but trading should improve in the second half. There will be £500,000 of charges relating to cost savings.
Poor weather and low consumer confidence have hit the home consumer electronics business. The increase in VAT will also have an (as yet) unquantifiable effect.
The automotive side has benefited from increased business from vehicle makers, including John Deere.
House broker FinnCap expects a fall in profit to around £200,000 on flat revenues of around £57m this year. The placing will dilute earnings by around 20%.
At 8p a share, Armour is valued at £5.48m - prior to the latest placing.
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