(Alliance News) -Â nmcn PLC on Friday said it is progressing a financing package as it revised its 2020 forecast lower again.
Shares dropped 23% to 175.00 pence in London on Friday morning. The stock has more than halved in the past year.
The Nottinghamshire-based engineering and construction said it has been working to secure a financing package "more appropriate to the size and nature of the group's businesses and risk profile."
"This has been a core focus of the board in light of a number of contractual issues exacerbated by the Covid-19 pandemic which have resulted in the group now expecting to report overall underlying losses before tax of GBP24 million, approximately GBP6 million of which are attributed to 2019," the company said, adding that it expects to publish 2020 results by the end of June.
Back in February, nmcn said it expected to report a 2020 loss of around GBP22 million, after in December guiding to a loss of GBP16.5 million which, in turn, was a negative revision from October's forecast of a loss between GBP13.5 million and GBP15.0 million.
For calendar 2019, nmcn reported profit before tax and non-recurring items of GBP10.4 million and a reported pretax profit of GBP7.4 million.
These issues have presented significant challenges, it said, requiring the board to actively manage working capital while working on the refinancing. Talks are progressing well, however, and it has now received heads of terms and is working towards concluding an agreement during June.
It did warn, though, that if it is unable to secure commitment for the necessary funding to satisfy its ongoing working capital requirements, then nmcn will have to consider "all appropriate options".
On trading, the company said activity levels are "reasonable" but it is dealing with some performance issues in the Building business unit and a number of challenges on two loss making contracts in Water, which is expected to hit its current year performance.
"The combination of internal issues and the Covid-19 pandemic has undoubtedly created very challenging circumstances for nmcn over the course of the last 18 months and I would like to thank my colleagues for their efforts. There is certainly much to do but with progress toward an appropriate financing structure being made I look forward to the challenge," said Chief Executive Lee Marks, who joined the company this month.
By Lucy Heming;Â lucyheming@alliancenews.com
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