LONDON (Alliance News) - FireAngel Safety Technology Group PLC axed its final dividend Friday after sinking to a loss amid overstocking in Germany.
The company also launched a GBP6.0 million capital raise to fuel its recovery.
In 2018, the fire safety devices maker sank to a GBP5.9 million pretax loss from a GBP545,000 profit the year prior. This was after revenue fell to GBP37.6 million from GBP54.3 million the year before.
Revenue performance was "severely impacted" by overstocking in the German trade market. After large orders at the end of 2017, Germany distributors continued to satisfy sales from these existing stocks rather than new sales.
"Whilst the board is disappointed with 2018's financial performance, it remains confident that the group's transition from a pure standalone hardware safety products supplier to a provider of connected safety solutions will underpin strong medium to longer-term growth and profitability," FireAngel Chair John Conoley said.
Conoley added: "Sales in the first three months of 2019 are ahead of the group's budget."
After cancelling its interim dividend, FireAngel also did not propose a final dividend. This is in contrast to a 2.5 pence full year dividend the year before.
FireAngel Chief Executive Officer Neil Smith added: "Whilst 2018 was a very challenging year for the group, we have made good progress in delivering our strategy to become a technology-led business with connected propositions that complement and drive core product sales."
"Recent announcements detailing a number of contract wins demonstrate the growing strength of our connected proposition and the progress being made within key markets," Smith continued. "Legislative change, the heightened awareness of connected products and our new ranges, combined with a series of self-help initiatives, mean we are now very well placed to return the business to strong medium to longer-term growth and profitability."
"To accelerate this recovery, we have taken steps to restructure our banking facilities to better meet our needs and announced today a placing and open offer to raise GBP6.0 million", Smith said.
In a separate announcement Friday, FireAngel launched an open offer and placing to raise up to GBP6.0 million. The open offer provides investors the opportunity to acquire 17 shares at 20p each for every 26 shares held.
An investor has already conditionally agreed to buy GBP6.0 million worth of shares in the firm through a placing. This placing, however, is structured with a clawback in which only shares not subscribed to by shareholders under the open offer would be issued under the placing.
Shares in FireAngel were 16% higher at 21.98 pence on Friday.
Fireangel (FA.)