Northern Bear sees trading results in line, makes disposal
Source - SMW
Northern Bear said, following a relatively mild winter and continued strong performance in its roofing division, FY trading results were expected to be at least in line with the prior year.
The company also announced the disposal of subsidiary Chirmarn Holdings Ltd to an independent third party for consideration of £50,000.
Chirmarn had, since its acquisition in 2007, made a substantial contribution to the group's performance and traded exceptionally well during the severe recession which commenced in 2008.
"However, in the financial year ended 31 March 2017, Chirmarn has been trading at a loss and has required continued funding from the company," said Northern Bear.
"The Board has provided all possible resource and support to attempt to improve matters, but the situation has persisted and there can be no certainty that there will be any improvement in the business activities of Chirmarn in the short to medium term."
Meanwhile, Northern Bear also announced it had signed a new £3.5m revolving credit facility agreement with Yorkshire Bank to replace the previous term loan facility which was due for renewal on 31 March 2017.
This new facility would expire in May 2020. The group also has a £1m committed overdraft facility.
"These new facilities were secured at reduced interest rate levels, which reflects the strength of recent and ongoing financial performance across the group," said Northern Bear.
It said the new facilities would provide the group with a much more flexible funding structure and, having reduced bank debt levels to a more appropriate level, a wider range of options for capital allocation in the future.
"Importantly, this should also assist in funding the Group's progressive dividend policy."