News blog
Autoclenz Holdings
- BY: Andrew Hore |
- POSTED: 01/08/2008 |
Autoclenz says it doesn’t expect to pay a dividend this year.
This will come as a shock to the shareholders who were attracted to the company by its yield. To be fair, trading isn’t going well but the trading statement doesn’t seem to indicate that things are that bad but management must believe that it is being sensible.
The car valeting and vehicle preparation business says that it continues to have the backing of its bank. Net debt was £3.67m at the end of 2007. That doesn’t sound a high figure but Autoclenz has little in the way of tangible assets and many banks are cautious about lending to businesses like this at the moment. That doesn’t mean that the business isn’t a stable one it has more to do with knee jerk policy on the part of the banks.
Both the first half figures and the full year results will be below expectations. House broker KBC Peel Hunt had forecast full year profits of £1.9m and earnings per share of 12.65p. The broker was already expecting a dividend cut.
The valeting business revenues have declined by 14%. New business is being won but at lower margins. The newer businesses are adding revenues.
A strategic review has been started and the aim is to build up non-automotive business. More cost cutting is also happening.
The shares slumped 12p to 27p following the news that the dividend is going to be passed. They are around half the level they were six months ago. Autoclenz is valued at £2.81m.
The interim figures will be published on 24 September.
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