Bagir Group Ltd Trading Update (6526K)
11 July 2017 - 4:00PM
UK Regulatory
TIDMBAGR
RNS Number : 6526K
Bagir Group Ltd
11 July 2017
11 July 2017
Bagir Group Limited
("Bagir" or the "Company")
Trading update
Bagir (AIM: BAGR), a designer, creator and provider of
innovative tailoring, provides the following update on its trading
for the six months ended 30 June 2017.
Following on from the significant progress made in 2016, during
which the Company repaid all borrowings, reduced annual costs by
c.30% and created a stable platform, the Company has continued to
implement its restructuring programme to create internationally
competitive manufacturing bases to combine with the Company's
innovative tailoring capabilities.
While the Company has made progress on all fronts it has been
slower than anticipated. Development of the new production lines at
our facilities in Vietnam and Ethiopia in order to support larger
volume orders has progressed, but is behind the original timetable,
which has impacted the Company's ability to secure these
orders.
As a result of this delay, the Company's order book particularly
for H2 has slowed and it now expects revenue and EBITDA for the
second half of the current financial year to be materially lower
than market expectations. First half revenues were approximately
$28.0m (H1 2016: $33.5m) and adjusted EBITDA was approximately
$0.8m (H1 2016: $0.8m). The adjusted EBITDA figure excludes a
one-off capital gain of c.$1.0m (this will increase EBITDA to
c.$1.8m). The Company expects to record a positive EBITDA
contribution in the second half of this financial year.
The Company's strategy remains to focus on new orders which will
generate an acceptable level of return to Bagir and, against that
backdrop, Bagir achieved important client wins during the period
and secured orders from a number of well known customers in France,
South Africa and Australia.
In addition, on 26 June 2017 Bagir announced that it completed
its acquisition of the remaining 50% shareholding in Nazareth
Garments, the joint venture owner of its manufacturing site in
Nazareth, Ethiopia, for a total consideration of US$1.9 million.
This site combines tariff free trade and low-production costs with
good connectivity for onward distribution.
Going into the second half of 2017 and into 2018, the Company
views its first mover advantage in Ethiopia as potentially
transformative to its medium-to-long term prospects. The planned
development of the 3200 TRS production lines in order to be able to
produce larger volume orders remains on schedule to be installed by
the end of 2017 and to be fully operational during H1 2018.
New product development has been an area of strength with the
Company developing platforms to support made-to-measure and
personalized garments. In April, six new concepts were released
including: The Transit Suit; City Traveller; Pack Away; Shaper
Pants; 0.755 Suit; and the Heater Body Suit. Initial orders have
already been taken for some of these lines.
Eran Itzhak, Chief Executive Officer, said: "Bagir is a stable
business with no bank debt and remains well placed. It is
frustrating that the delays that we have experienced in the
development of our manufacturing facilities have prevented us
securing certain larger volume orders in the current financial
year. However, we remain confident of our strategic plan and our
ability in time to substantially increase our customer base. Taking
100% control of our Ethiopian site at the end of June was a
significant step forward in achieving this aim."
Enquiries:
Bagir Group Limited
Eran Itzhak, Chief Executive Officer +44 (0) 1483
Udi Cohen, Chief Financial Officer 751577
N+1 Singer (Nominated Adviser &
Broker) +44 (0)20 7496
Alex Price 3000
Novella Communications (Financial
PR)
Tim Robertson +44 (0)20 3151
Toby Andrews 7008
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTEAXXEFSLXEFF
(END) Dow Jones Newswires
July 11, 2017 02:00 ET (06:00 GMT)
Bagir (LSE:BAGR)
Historical Stock Chart
From Apr 2024 to May 2024
Bagir (LSE:BAGR)
Historical Stock Chart
From May 2023 to May 2024