(Alliance News) - Bilby PLC sunk to an annual loss following the troubles experienced at its P&R subsidiary, the firm said Thursday.
Shares in the gas heating, electrical and building services provider were 9.5% lower in London in mid-morning trade at 23.52 pence each.
In the year ended March 31, Bilby sunk to a pretax loss of GBP10.4 million from a GBP4.3 million profit the year before.
Bilby saw a sharp increase in non-underlying items in the period, rising to GBP12.9 million from GBP1.5 million the year before.
Bilby said an internal review isolated its loss-making activities to subsidiary P&R, which recently gave notice of termination of its contract to supply building maintenance services for UK Ministry of Defence properties. This is still subject to dispute and resolution proceedings.
Additionally, delays to a major gas installation contract for East Kent Housing resulted in Bilby's contract being terminated.
P&R's gas servicing division has been closed by Bilby and the subsidiary now has no day-to-day operations.
The company's total revenue declined 16% to GBP66.5 million from GBP78.8 million the year before. Excluding P&R, Bilby said its revenue grew 5.3% year on year.
Also excluding P&R, Bilby's earnings before interest, tax, depreciation and amortization were flat at GBP5.2 million.
"Having taken decisive action to resolve the poor performance of one subsidiary, I am confident the business has the solid operational footing to grow. The operational and financial review that has been ably spearheaded by our new chief executive, David Bullen, and backed up by the board, has already ensured we are operating more efficiently, and each subsidiary is benefiting from being a more closely integrated part of the group," said Chair Sangita Shah.
Shah added: "Bilby is in a market with strong fundamentals. With a strengthened board in place coupled with continuing operational improvements, the group is well positioned to drive profitable and sustainable growth."
Bilby did not declare a final dividend and said it intends to reinstate dividends "as soon as it is feasible". Bilby paid out 2.5 pence in dividends during the period - including a 0.5p interim dividend and last year's 2.0p final dividend.
The company said its current trading is in line with management expectations, and is confident of maintaining underlying revenue of GBP59 million with an adjusted Ebitda of "not less" than GBP4.5 million. Bilby generated underlying revenue of GBP59.4 million in financial 2019.
