Northern Bear Plc Disposal and new bank facilities (2778B)
03 April 2017 - 4:01PM
UK Regulatory
TIDMNTBR
RNS Number : 2778B
Northern Bear Plc
03 April 2017
3 April 2017
Northern Bear plc
("Northern Bear" or the "Company")
Disposal of Chirmarn Holdings Limited
Trading Update
New Bank Facilities
The Directors of Northern Bear (the "Board") today announce the
disposal of its subsidiary Chirmarn Holdings Limited ("Chirmarn")
to an independent third party for consideration of GBP50,000 (the
"Disposal").
The Disposal follows a detailed review by the Board of the
entire Chirmarn operation. Chirmarn provides asbestos removal and
surveying services to a range of local authority and commercial
customers across North East England. Since its acquisition by the
Company in 2007, Chirmarn has 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. 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.
Further, the sector in which Chirmarn operates differs from those
in which other Group companies operate in that asbestos, for health
& safety reasons, has not been widely used as a construction
material for some time and hence we believe there is limited
potential for long term market growth.
As a result, the Board believes that the Disposal is in the best
interest of shareholders and will allow the Board to focus on the
Group's core businesses and markets. The purchaser has knowledge of
the asbestos industry to support their own strategic plans, hence
we consider that the disposal is also in the best long term
interests of Chirmarn and its employees.
The Disposal will result in a loss on disposal in the Company's
financial year ended 31 March 2017, which will be treated as an
exceptional item for reporting purposes.
Trading update
The Board is pleased to announce that, following a relatively
mild winter and continued strong performance in the Group's Roofing
division, trading results from continuing operations for the
financial year ended 31 March 2017 are expected to be at least in
line with the prior year.
Further guidance on trading and the Group's net debt position
will be provided closer to the publication of the Group's full year
results.
New bank facilities
The Group is also pleased to announce that it has signed a new
GBP3.5m 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 will expire in May 2020. The
Group also has a GBP1m 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.
The new facilities will 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
We would like to express our thanks to Yorkshire Bank for its
continued support.
For further information, please contact:
Northern Bear PLC
Steve Roberts - Executive
Chairman +44 (0) 166 182 0369
Tom Hayes - Finance Director +44 (0) 166 182 0369
Strand Hanson Limited (Nominated
Adviser and Broker)
James Harris
James Spinney
James Bellman +44 (0) 20 7409 3494
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
**ENDS**
This information is provided by RNS
The company news service from the London Stock Exchange
END
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