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(Alliance News) - Scapa Group PLC on Tuesday said a large exceptional charge resulted in a swing to a loss in financial 2020 and it has decided against paying a final divided to preserve cash amid the Covid-19 pandemic.
The Ashton-under-Lyne, England-based healthcare and industrial company also reported the departure of Chair Larry Pentz and said that it has experienced a significant deterioration in revenue during the first quarter of financial 2021 due to government-enforced lockdowns for some customers.
"This has had a major impact on Scapa's financial position and we immediately put in place a range of mitigating actions including internal cost expenditure streamlining, debt renegotiation and an equity raise. We believe these actions will provide Scapa with sufficient working capital and liquidity to withstand the adverse financial impact caused by the pandemic and provide flexibility to capitalise on potential opportunities in a post-Covid-19 environment," Scapa said.
Pentz, who has been Scapa's chair for over three years, has decided not to offer himself for re-election at the 2020 annual general meeting. Scapa has appointed Chris Brinsmead as a successor to Pentz.
Brinsmead, who will be appointed as non-executive chair from August 7, is currently chair of Collagen Solutions PLC and Proveca Ltd. He was formerly chair of AstraZeneca Pharmaceuticals UK, president of AstraZeneca UK & Ireland.
For the year to March 31, Scapa recorded a pretax loss of GBP51.0 million compared with pretax profit of GBP14.9 million.
The swing to loss was attributed to exceptional charges of GBP68.4 million including impairments of GBP54.6 million, site closure costs of GBP8.0 million and contract-specific exceptional costs of GBP7.2 million associated with the loss of the contract with ConvaTec Group PLC. In financial 2018, exceptional costs totalled GBP12.8 million.
Annual revenue increased 2.8% to GBP320.6 million from GBP311.8 million.
Scapa has decided not to propose a dividend payment as part of its actions to strengthen the liquidity position of company following the impact of Covid-19. The company ended the year with an adjusted net debt of GBP54.4 million versus GBP43.7 million a year ago.
Shares in Scapa were down 13% at 104.88 pence each in London on Tuesday morning.
By Tapan Panchal; tapanpanchal@alliancenews.com
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