Collagen To Restructure New Zealand Unit, Expects Annual Loss to Widen

LONDON (Alliance News) - Collagen Solutions PLC said Wednesday that it intends to re-structure its New Zealand operations for it to focus its activities in the area of tissue collection and processing a undisclosed segment believed to be valued in excess of USD100 million.

The company expects the restructuring to lead to achieving profits earlier than expected. The annual cash cost savings from the restructuring are estimated to be GBP200,000, with one-off cash costs of GBP150,000.

Collagen Solutions also said it will record further non-cash asset write-downs due to the restructuring which would widen the loss for the year beyond current market expectation.

The manufacturer of medical grade collagen, tissues, and related medical devices, added that it will continue to source both New Zealand and Australian collagen exclusively for both our customers' and proprietary products.

The restructuring is expected to enable the company to consolidate its existing collagen production into Glasgow. The restructuring is subject to an employee consultation process expected to be concluded before the end of April.

Shares in the company were trading 15% lower at 2.84 pence on Wednesday.