Impairment of Intangible Asset

 

TIDMROM 
 
RNS Number : 4709X 
Romag Holdings PLC 
07 December 2010 
 

 
 
 
                  Romag Holdings plc ("Romag" or the "Group") 
 
                         Impairment of Intangible Asset 
 
 
 
Romag, a specialist manufacturer of glass and plastic composites for 
renewable energy, security, transport and architectural applications announces 
that it now expects to impair intangible fixed assets amounting to GBP2,371,000 
in its financial statements for the year ending 30 September 2010. The 
circumstances underlying this decision are explained below, but this matter is 
not expected to result in any significant cash outflow or negatively impact the 
group's ability to satisfy its customers' demands in the foreseeable future. 
Certain contractual issues have arisen with one of the Group's suppliers of 
photovoltaic cells. The supplier has indicated that they no longer supply 
photovoltaic cells of the type contracted for and used by Romag. Despite this, 
Romag has received a pre-action letter of claim from the supplier demanding 
Romag take cells of a new type.  Romag views this action as unjustified and 
without merit. 
When the contract with the supplier was entered into, Romag, in line with market 
practice, paid a deposit to secure the right to receive supplies under the 
contract.  Such items are treated as intangible assets and amortised pro rata to 
the receipt of supplies.  As at 30 September 2010, the balance of the 
unamortised intangible asset relating to this contract was GBP2,371,000. 
Following consultation with legal advisers, Romag is taking all necessary steps 
to protect its position and will be robustly pursuing the recovery of the 
outstanding balance of the deposit and/or damages from the supplier.    However, 
given the likelihood that Romag will not now be able to amortise the intangible 
asset against future supplies under the contract, the group expects to include 
an impairment charge of GBP2,371,000 in its accounts for the year to 30 
September 2010 to reduce the carrying value of this component of the intangible 
asset to GBPnil.  Any recovery will be accounted for in future accounting 
periods. 
The Group does not expect the lack of supplies from this supplier to impact on 
its trading.  Romag anticipates that its other suppliers of photovoltaic cells 
will be able to supply Romag's requirements for the foreseeable future. 
Romag expects to announce its preliminary results for the year to 30 September 
2010 in January 2011. 
 
 
 
Enquiries: 
 
Romag Holdings plc                         01207 500 000 
John Kennair 
David Banks 
 
Kreab Gavin Anderson                    0207 074 1800 
Ken Cronin 
Michael Turner 
Natalie Biasin 
 
Arbuthnot Securities                        0207 012 2000 
Antonio Bossi 
Tom Griffiths 
 
Note to editors: 
 
Romag Holdings plc is a leading manufacturer of glass and plastic composites 
based in Consett, County Durham.  Romag has developed a range of photovoltaic 
glass products (PowerGlaz) for use in the generation of renewable energy. 
 
Romag also manufactures a wide range of products for the security, transport and 
architecture markets to protect people against a variety of risks and threats. 
Businesses using the group's high-impact glass products include BAA, Securicor, 
government departments, banks, building societies and train operators. 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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