Debt management firm Relax Group needs to raise cash to put itself on a firm footing.
Results for the six months to June 2009 will show a substantial loss exacerbated by large asset write downs. The figures for the five months to December 2008 will also be restated. Revenues were £6.5m in the five months to December 2008 and a profit of £668,000 was reported.
Shares in Relax slumped 6p to 19p each, which values the company at £5.79m. The share price has fallen by three-quarters in the past three months.
New chief executive Ken Gaskell is damning in his assessment of the business. He says that it lacked financial discipline and forward planning and there was over manning. He also believes that accounting practices were aggressive.
Costs have been cut but debt is a problem. Debt was negligible at the end of 2008 but the position has worsened since then. There is a large backlog of creditors on top of the heavily indebted position in which Relax finds itself.
A share issue and renegotiated debt facilities with lenders are needed before Relax can move back into profit.
The interim figures will be published on 30 September 2009.
© 2021 Aim Micro. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.