GYG PLC Financial and Trading Update (6790G)

TIDMGYG

RNS Number : 6790G

GYG PLC

28 July 2021

The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of Article 7 of Regulation (EU) No. 596/2014, as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

28 July 2021

GYG plc

("GYG", the "Company" or the "Group")

Financial and Trading Update

The board of GYG (the "Board") provides an update in relation to various matters, as set out below.

Update re: Nobiskrug Shipyard and the Company's financial position

The Company announced, on 13 April 2021, that administrators had been appointed at the Nobiskrug Shipyard in Germany. The Company has three active contracts and certain invoices outstanding, relating to work completed in 2021 at the shipyard, totalling approximately EUR2.8m (excluding VAT).

The Company has, since April, continued in constructive discussions with the various parties involved, with a view to agreeing a programme of works and a payment schedule for completion of the contracts, which both minimises GYG's financial exposure and achieves a satisfactory outcome for the end clients.

On numerous occasions during this period, it appeared to the Board that a satisfactory resolution was imminent. The discussions have, however, taken longer to conclude than the Board had originally anticipated. Whilst the Board continues to be confident in achieving a positive outcome for the Company, and none of the outstanding balances due to the Company are in dispute, the Board cannot guarantee a swift resolution to this matter.

Accordingly, the Board now expects that, as a result of the continuing unforeseen delay in resolving the Nobiskrug situation, in combination with the normal seasonal trading profile of the business, the Company will suffer a temporary working capital shortfall within the next one to two weeks, without an injection of bridge funding.

Loan Agreement

Having regard to the current status of the situation at Nobiskrug, the Company has agreed terms for North Atlantic Smaller Companies Investment Trust plc ("NASCIT", an associate of Harwood Capital LLP ("Harwood") , the Company's second largest shareholder) to provide the Company with a short-term loan ("Loan" or "Loan Agreement") for EUR3 million which will be advanced immediately. The Company has, since 9 April 2021, been in an offer period (as defined in The City Code on Takeovers and Mergers), with Harwood identified as a possible offeror.

The Loan, which will be secured by way of an assignment over the outstanding invoices related to work performed to date by the Company for the Nobiskrug Shipyard, attracts interest at 10% p.a.. There are no arrangement fees associated with the Loan, which can be repaid by the Company at any time without penalty on or before its maturity date of 31 December 2021.

The Board intends to repay the Loan following resolution of the situation at Nobiskrug and payment of the amounts owed to the Company pursuant to the related outstanding invoices.

Related party transaction

NASCIT is a related party under the AIM Rules for Companies ("AIM Rules"), being an associate of Harwood Capital LLP, a substantial shareholder. Entry into the Loan Agreement therefore constitutes a related party transaction under the AIM Rules. Accordingly, the Directors (each of whom is considered by the Board to be independent of NASCIT), consider, having consulted with Singer Capital Markets Advisory LLP, acting in its capacity as the Company's nominated adviser, that the terms of the Loan are fair and reasonable insofar as the Company's shareholders are concerned.

Update on trading for the six months ended 30 June 2021

Turnover and activity levels across the Group were broadly in line with the Board's expectations during H1 2021. This included the benefit of some revenue deferred from Q4 2020, as previously reported.

Overall, and, notwithstanding the ongoing situation at Nobiskrug and the consequential effect on the Company's short-term funding position as described above, the Board is broadly satisfied with the Group's trading performance for the period and the order book position remains strong.

The Company will release a more detailed update on trading, for the six months ended 30 June 2021, during August.

Spanish Tax Authority - audit

The Company also announces that the Spanish Tax Authority has recently conducted an audit into certain legacy tax matters relating to a period several years prior to the Company's IPO on AIM in 2017. The audit is now nearing its formal conclusion and agreement in principle has now been reached as to the amount owed by the Company. Accordingly, the Board has made a provision of EUR1.1 million in the Company's accounts.

For further information:

 
 GYG plc                          via FTI Consulting 
  Remy Millott, Chief Executive    Tel: [phone] 
  Officer 
  Kevin McNair, Chief Financial 
  Officer 
 Singer Capital Markets           Tel: [phone] 
  Tom Salvesen 
  Peter Steel, Amanda Gray 
 FTI Consulting                   Tel: [phone] 
  Alex Beagley 
  Fiona Walker 
  Rafaella de Freitas 
 

Notes to Editors:

GYG is the market leading superyacht painting, supply and maintenance company, offering services globally through operations in the Mediterranean, Northern Europe and the United States. The Company's brands include Pinmar, Pinmar Yacht Supply, and Technocraft. GYG's operations can be divided into three key sales channels:

-- Refit: repainting and finishing of superyachts, normally as part of a refit programme. Revenues also include scaffolding and containment work;

   --      New Build: fairing and painting of new vessels as part of the build process; and 

-- Supply: selling and delivery of maintenance materials, consumables, spare parts and equipment primarily to trade customers.

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 [e-mail] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

TSTDDGDRXBDDGBR

(END) Dow Jones Newswires

July 28, 2021 02:00 ET (06:00 GMT)