entu (UK) plc Trading Update (1723W)

TIDMENTU

RNS Number : 1723W

entu (UK) plc

07 February 2017

Entu (UK) plc

Update on 2016 Results, Balance Sheet Review, Current Trading and Outlook

Underlying 2016 Results

Further to the announcement of 28 October 2016, Entu confirms that its current EBITDA expectation, for the year ended 31 October 2016 ('FY 2016'), from continuing operations and before exceptional items, is expected to be within the range previously announced, at approximately GBP2.6 - 2.7 million. In addition, exceptional costs relating to the planned cost-saving processes in FY 2016 are expected to be approximately GBP1.9 million in line with management's previous expectations. Net cash at the year-end was GBP0.8 million.

Discontinued Operations, Review of Balance Sheets and Accounting Policies

As previously reported, since the Group was admitted to AIM, there have been a number of significant changes both in Entu's markets and within the Group itself, resulting in a simpler business and re-focus on the core Home Improvements business. These changes include: the closure of the solar business in 2015 after the Government's unexpected reduction in feed-in tariffs; the disposal of Norwood Interiors; the exit from certain under-performing commercial business streams; the closure of Europlas; and the strategic disposal of Astley Facades Ltd. In the light of these developments, and as part of the year-end process, the Group has undertaken a thorough and detailed internal review of the balance sheets of the non-trading and trading subsidiaries of the Group.

As a result of the costs incurred to exit from these discontinued operations, the balance sheet review exercise and other non-recurring charges, the reported results for FY 2016 will contain further exceptional and discontinued items totalling approximately GBP6.8 million. A significant proportion of these items are non-cash in nature.

The Group has also conducted a detailed review of its accounting policies to ensure they are in line with best practice and appropriate to the business going forward. This has resulted in the accounting for its Repairs and Renewals Service Agreements and finance commissions to be changed to reflect more appropriately the timing of revenue recognition as well as other adjustments to bring accounting policies in line across the Group. These adjustments are not expected to have a material impact on the FY 2016 result, but will result in a prior year adjustment of approximately GBP2.0 million.

The aggregate effect of these actions, taken with the objective of providing the Group with a balance sheet to support future trading, is that net liabilities of the Group are expected to be in the region of GBP8.5 million, subject to finalisation of the Group's tax positon for the year. The losses are expected to be concentrated in the subsidiaries relating to the discontinued operations.

Dividend

In view of the above, the Board has determined that it is not appropriate to propose a final dividend in respect of the financial year ended 31 October 2016. The Board intends that Entu return to the dividend list as soon as possible. The Directors will assess the level of future dividends as the Group looks to strengthen its distributable reserves.

Current Trading and Outlook

The Board confirms that revenues for the first 3 months of the current year are in line with management expectations. It also confirms that it does not expect the balance sheet review to have a material impact on its expectations of profitability or cash generation in the current year.

Full Year Results

The Group expects to announce its full year results in early March 2017 at which point it will provide further detail on the outturn for 2016 and the Group's plans for the current and future financial periods.

7 February 2017

ENQUIRIES

 
 
 entu 
  Ian Blackhurst, Chief Executive 
  Officer 
  Neill Skinner, Chief Financial 
  Officer                            020 7457 2020 
 Zeus Capital Limited (Nomad 
  & Broker) 
  Andrew Jones / Dan Bate 
  John Goold / Dominic King          020 3829 5000 
 Instinctif Partners (Public 
  Relations)                         020 7457 2020 
 Helen Tarbet 
  James Gray 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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February 07, 2017 02:00 ET (07:00 GMT)