£8m placing has helped business reduce net debt to £3.5m
Companies: Driver Group Plc
Driver Group gave a brief but welcome trading update on Friday, telling investors that performance had improved following its £8m placing to normalise the capital structure of the business in February.
In its FY16 results, it reported a considerable increase in net borrowings from £2.5m in 2015 to £9.9m, and in negative operating cash flow to 0.17p/share.
It had to raise £8m through equity financing after facing a crisis point in February with current liabilities hitting £8.59m but with just £0.56m in cash/equivalents.
Since then, it has seen much improved underlying trading YoY, and a dramatically reduced net debt position to £3.5m. Investors appeared to be positive about the news, with shares up 3.5% by midday Friday.
Broker N+1 Singer said that the update was positive, confirming a better H1 and reiterating full year expectations. Analyst James Tetley made no changes to his forecasts:
"Driver is well equipped to continue its recovery and rebuild margins towards the attractive levels that the Group used to achieve routinely."
Singers said it expects net debt to reduce to below £2m by the end of the year.