LONDON (Alliance News) - Engineering company Hightex Group PLC Tuesday reported a significantly wider loss for the first-half of the year, after posting a big drop in revenue.
The company designs, fabricates and installs large-area, cable-supported, lightweight membrane roofs and facades.
Hightex reported a pretax loss of EUR5.5 million for the six months to June 30, much bigger than the EUR1.4 million loss in recorded for the first-half of 2013, as revenue dropped to only EUR85,000 compared with EUR3.2 million a year earlier.
"No significant new contracts of high value were won and this has to be placed into context by the fact that there very few new large area membrane projects were started in this period," the company said in a statement.
"Management have responded to the financial pressures by making further reductions in general expenses, these being mainly achieved in the German operating company," it added.
Hightex said it also booked a EUR4.0 million goodwill impairment in the first-half.
Hightex said it has identified a number of new projects, but said that while its believes those contracts will be awarded, the current political and military tensions in Europe and the Middle East are likely to delay their signing until early 2015.
"These potential contracts, include both stadia and infrastructure projects in the Middle East, five stadia projects related to the 2018 FIFA World Cup in Russia, as well as other identified projects in Western Europe including France, Spain and the UK. If successful, such contract wins would increase revenues substantially in 2015/2016 and subsequent years, thus realising prospects for a return of group profitability," the company said.
A majority of the company's revenues were earned from contracts in Brazil, working on stadiums ahead of the 2014 World Cup in June. The company said in June that it had made a provision for its Brazilian receivables, but as a result of this uncertainty, its working capital position had been threatened.
In order to counter this, the company opted to sell a majority 50.15% stake in its thermal cooling business SolarNext AG during 2013, and signed a loan facility with TCA Global Credit Master Fund LP for up to USD10 million in February.
"As stated earlier the decision to dispose of a majority stake in SolarNext AG has enabled the company to devote all its current resources, both human and financial, to the membrane business. Further sale of the remaining shares is planned in the second half of the year and possibly extended into 2015," the company said in its statement Tuesday.
Hightex shares were down 3.1% Tuesday afternoon, trading at 0.169 pence.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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