Water, fire and pest control compliance services provider Green Compliance is trying to recapitalise its balance sheet and its share price has halved on the issue of its interim figures.
At 2.12p a share, down 2.38p, Green Compliance is valued at £770,000. The share price has slumped by 94% over 2012. This means that any fundraising is likely to be highly dilutive. Green Compliance is also in discussion with HSBC about the structure of its bank facilities.
Net debt edged ahead to £9.43m in the six months to September 2012. That includes £7.4m from the £7.5m HSBC revolving credit facility. There is also a £1.75m overdraft facility. There is additional potential deferred consideration of up to £1.07m.
In the six months to September 2012, revenues fell from £10.4m to £9.77m, while the loss fell from £2.14m to £2.04m. Most of the loss was due to amortisation. The cash outflow from operating activities fell from £1.24m to £314,000.
The decline in revenues was due to existing customers in the construction and facilities management sector are spending less. The fire services division was the only one to increase revenues in the first half and it moved into profit.
The acquisitions made in the past few years have been integrated into three divisions and have a common sales platform. Some back office work has been outsourced. The top 50 customers account for 35% of revenues and the company is trying to cross sell services to these important accounts.
The core markets are fragmented and offer plenty of potential. They are estimated to be worth between £1bn and £1.5bn. Regulatory requirements mean that spending will have to be made in these sectors. Green Compliance reckons that the water treatment and hygiene sector, largely focused on legionella control, is still the least compliant of all the company’s services.
Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFDecember2012_39.pdf
© 2020 Aim Micro. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.