IDE Group Holdings PLC Trading Update (6616U)
16 Julho 2018 - 3:00AM
UK Regulatory
TIDMIDE
RNS Number : 6616U
IDE Group Holdings PLC
16 July 2018
IDE Group Holdings Plc
("IDE", the "Group" or the "Company")
Trading Update
IDE Group Holdings plc, the mid-market network, cloud and IT
Managed Services provider, announces an update on trading for the
six months to 30 June 2018 and an update with respect to the
ongoing strategic and operational review of the Group.
Trading Update
Unaudited revenue for the six months to 30 June 2018 is expected
to be approximately GBP29 million (H1 2017: GBP30 million),
including GBP6 million (H1 2017: GBP3 million) in respect of 365
ITMS Limited which was acquired in April 2017. As reported
previously, a large proportion of managed services revenue in 2017
arose from one-off projects, which has been lower in the current
year.
The Company commenced a cost reduction programme in January,
however there is still significant work to be done to ensure the
business has a sustainable and profitable operating model and an
appropriate underlying cost base going forward. Furthermore,
certain supplier agreements entered into during previous periods
relating to fibre, data centres and outsourced support have
adversely affected profitability for the current period and are
therefore being reviewed in the context of current performance.
As previously announced, the Company expected profitability to
be impacted in 2018. Accordingly, Group management accounts for the
six months to 30 June 2018 show an Adjusted EBITDA* of c. GBP0.25
million (H1 2017: Adjusted EBITDA* of GBP2.4 million), subject to
further work and review in relation to the supplier agreements
referred to above, in addition to a review of capitalisation of
internal project costs and classifications of exceptional items
which is underway. Whilst profitability was expected to improve
steadily throughout 2018 the expected benefits of the cost
reduction programme have not been realised at the anticipated rate,
but this continues to be a target for the full-year as the ongoing
strategic and operational review is accelerated and executed. The
Group expects to report interim results for the six months ended 30
June 2018 in September 2018.
The reduction in one-off project revenues combined with the
disproportionate cost base has continued to affect the Group's cash
generation. The Company raised GBP2 million by way of the issue of
unsecured loan notes in May 2018 to support the Company's working
capital needs, and the Board continues to review the Group's
options with respect to raising further capital to address the
ongoing working capital requirements of the Group. Net debt as at
30 June 2018 totalled c. GBP13 million. The Board continues to
liaise regularly with its lenders who remain supportive during the
ongoing strategic and operational review.
Strategic and Operational Review
As previously announced the Company is currently engaged in an
ongoing strategic and operational review, the results of which are
expected to be announced during the third quarter of the year. As
part of this review the Company is evaluating a range of options to
recognise value for stakeholders, including the divestiture of
certain business lines and assets within the Group.
At this time all such discussions are at a preliminary stage.
Several expressions of interest have been received for certain
business units of the Group but there can be no certainty these
discussions will result in a transaction nor as to the terms of any
such transaction. For clarity, the negotiations do not include the
consideration or solicitation of bids for the shares of the quoted
Group.
A further update will be made as and when appropriate.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
* Earnings before interest, tax, depreciation and amortisation
and excludes transaction and integration costs and charges for
share-based payments
IDE Group Holdings Plc Tel: +44 (0)344 874
Bill Dobbie, Interim Chairman 1000
Ian Smith, Executive Director
N+1 Singer Tel: +44 (0)20 7496
Nominated Adviser and Broker 3000
Jen Boorer
MXC Capital Markets LLP Tel: +44 (0)20 7965
Financial Adviser 8149
Charlotte Stranner
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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