Firm announced that it would have to raise £185m to shore up balance sheet
Shares in Laird Plc fell 8% as the market opened on Tuesday after the AIM-listed tech firm reported disappointing full-year results for 2016 and told investors it would have to raise around £185 million to shore up its balance sheet.
Reported revenue rose 27%, but was down 0.4% on a constant currency basis year on year, after the firm enjoyed significant currency tailwinds. There was 4% constant currency growth in the Wireless Systems Division, but this was offset by a 3% fall in Performance Materials.
Underlying operating profit fell to £61.9m from £80.7m in 2015, which Laird says was due to weaker sales and margin pressures in the Precision Metals business, challenging trading conditions for the division that supplies wireless automation controls into the US rail freight sector, and finally due to losses related to the Novero acquisition.
This led to pre-tax profit falling to £51.1m from £73.1m. There was also a £155.5m non-cash impairment of goodwill in the Wireless Systems Division. Net debt ended the year at £344.6m, 3.2x EBITDA.
"No final dividend will be paid in respect of 2016 as previously indicated, therefore the total dividend for 2016 will be the interim dividend of 4.53p (2015: 13.0p)."
The Group, which supplies parts to many large tech companies including Apple, also announced on Tuesday that it intended to raise £185m (before expenses) to help shore up its balance sheet. New shares will be priced at 85p, a significant 51.4% discount to the Closing Price on 27 February 2017.
Despite the disappointing figures, the Group says there are positives for 2017, including its operational improvement programme which looks set to deliver annualised savings of $15m in 2017 and $20m from 2018.
CEO Tony Quinlan said it had been a disappointing year, with challenging conditions in certain key end markets compounded by "material" inefficiencies in the Group's operations.
"We have taken corrective actions, including putting in place a substantially new leadership team and establishing a clearer structure to optimise our strong technology and engineering. We are reducing overheads and driving a forensic approach to improving the efficiency and profitability of our operations."
He added that in the near-term, the board was focused on delivering a profit uplift and establishing a business model that can deliver long-term growth.