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David Tilman has been appointed finance director of Eruma having invested £135,000 in the latest fundraising.
The security blinds and emergency lighting supplier raised £479,000 at 9p a share. The fundraising followed a 20-for-one share consolidation on 1 September 2010. The share price has fallen to 5.5p since the placing. Eruma is valued at £860,000.
Eruma needed the additional cash because it was finding it difficult to raise trade finance from banks. In the first seven months of the year none of the directors took any salary in order to conserve working capital for the company.
Tilman owns 9.6% of Eruma and he has experience as finance director at a number of construction businesses.
Eruma’s revenue growth has been held back by its lack of cash and that is why revenues declined from £561,000 to £493,000 in the six months to June 2010. Revenues from the security business fell sharply and emergency lighting revenues jumped from £27,000 to £237,000. Lower overheads meant that the loss fell from £524,000 to £469,000.
Prior the latest fundraising, Eruma had net debt of £744,000. There was a small cash outflow in the first half.
The order book is worth £908,000. This includes a £379,000 emergency lighting contract for Bristol Airport.
These contracts will require working capital and Eruma could continue to be constrained by a lack of cash.
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