Outlook
We are maintaining sales guidance of £23m for the year ending 31 December 2024. However the scrap problems in particular have absorbed a sizeable amount of working capital and cash. The Board are assessing options to address this short"
How can you say no cash is needed as I am curious to find out about "options that board are assessing"
And needs to raise it through placing.What I dont understand is why did they let shareprice get this low and not raise it around 6.This company needs minimum 5 millions and that would dilute existing shareholders heavily.
Brand has some value, buying it out of administration is best outcome for JD , he can leave loss-making stores with administrators along with other hmrc liabilities but that might not be acceptable for lenders.
On the flip side if it fails to hit targets then there will be serious cashflow problems as debt repayments would need to be moved forward. There is nothing new in this RNS so why did they not release it with quarterly production update?
Game was up when they said they have exceeded the budget and need more money and worst thing is they did not even know how much money they needed.Shareholders were going to get wiped out at that point.Shareprice hit 16 and a few people got in for a quick trade and rest is as they say is history.Someone has made a lot of money here and half a billion has gone to waste.
Management seems to be out of depth, they raised 10 millions not so long ago and have burnt through that.Product is there,demand is there but incompetent management has ruined it.Right now you would want to hold these to get shafted by management when they announce placement.
He should have stated cash position and that would have clarified the situation to certain extent.Witholding that information only means one thing and that is "placing".Market adjusted placing price to 5p but there is a seller in background.Even if they were to place new shares today it has to be carried out at a discount to current price.
Problem is lenders are protected,if it was to go into administration they will get most of their money back.Shareholders wont get anything.Right now liabilities exceed assets by 41 millions but do think brand has some value.Hillco specialises in buying companies out of administration.Current cash-burn is 1.5 millions per week and revenue is falling.