LONDON (Alliance News) - Modern Water PLC said Thursday a large exceptional goodwill impairment charge and lower revenue generation has resulted in a deepened pretax loss for 2017.
The UK listed wastewater treatment services provider recorded a pretax loss of GBP5.2 million for 2017, compared with GBP2.6 million pretax loss a year ago, on revenue of GBP3.5 million and GBP3.6 million, respectively.
This was after a goodwill impairment charge for the year totaled GBP1.5 million, versus nil a year ago. A goodwill impairment is a charge that companies record when the carrying value of assets on financial statements exceeds its fair value.
Operating loss, before exception costs, for 2017 stood at GBP2.8 million versus GBP2.5 million loss in 2016.
The company's membrane division continued to make good progress, more than doubling 2017 revenue to GBP370,000 from GBP150,000 million. 2017 revenue for the monitoring division fell in the period to GBP3.2 million from GBP3.5 million due to the company's decision to terminate the contract with its Chinese distributor and instead pursuing a multi-channel sales approach.
"The key challenge for the company in 2018 is to close out the many commercial opportunities we are seeing and to sign additional partners to increase the geographic spread of our technology," the company said.
In a separate announcement on Thursday, Modern Water said it had entered into a new GBP500,000 two-year loan facility with Barclays Bank PLC.
The loan will accrue an 8% interest over the base rate and will be backed by the European Investment Bank. No capital repayment will be due in the first year.
Shares in Modern Water were 22% lower at 7.84 pence on Thursday.
Barclays (BARC)