LONDON (Alliance News) - Tex Holdings PLC warned Monday it will post a loss for 2018 due to poor second half trading and the introduction of a new accounting standard.
Further, the loss means Tex will breach bank loan covenants.
"The introduction of the new accounting standard affecting the recognition of revenue has had an impact on certain projects. Also, trading has been lower in the second half of the year as previously announced," said Tex.
Tex warned on its lower than expected earnings in the second half back in December, which results from a shipment delay for project related items.
Given this result, engineering product supplier Tex is not recommending a final dividend payment for 2018.
In 2017, Tex returned 8.5 pence to shareholders via a 2.5p interim and 6.0p final dividend, with pretax profit coming in at GBP927,000.
Moreover, Tex will also be in breach of "certain bank loan covenants which will be subject of discussions with its bank".
An undisclosed "major shareholder", Tex said, has indicated its intent to support the group and acknowledged that "a change in accounting treatment has been a partial cause of the bank covenants being breached".
Shares in Tex closed untraded on Monday, last quoted at 107.50 pence each.
