7th May 2020 11:43
(Alliance News) - Embattled events organiser Hyve Group PLC on Thursday said it swung to a pretax loss for the first half of financial 2020 and announced plans to raise GBP126.6 million through a fully underwritten rights issue to shore up liquidity in the face of the disruption caused by the Covid-19 pandemic.
The FTSE 250-listed company has been hit hard by the virus outbreak, with cancellation and postponement of scores of events.
Hyve plans to undertake a rights issue of up to nine new shares at 69 pence each for every 40 existing ordinary shares, to raise gross proceeds of GBP126.6 million. Net proceeds are expected to total GBP116.8 million.
Shares in Hyve were down 8.4% at 19.64p each on Thursday morning.
The company also intends to implement a consolidation of every 10 existing ordinary shares into 1 new share. The rights issue therefore is equivalent to 9 new shares for every 4 consolidated shares.
Proceeds from the fundraise will be used to reduce net indebtedness and provide working capital flexibility to allow Hyve to protect the value of its core events
London-based Hyve additionally has secured a waiver to banking covenants up to and including March 2022 and deferral of loan amortisation payments totalling GBP35 million until maturity in December 2023. The banking waiver and loan payment deferral are subject to completion of the rights issue.
In its results statement on Thursday, Hyve said it swung to a pretax loss of GBP168.3 million for the six months to March 31 from a GBP1.9 million profit a year ago, primarily due to a GBP166.8 million non-cash impairment charge resulting from the coronavirus outbreak.
Headline pretax profit fell 19% to GBP19.8 million, due to event postponements and cancellations as a result of the pandemic.
First-half revenue declined 11% to GBP96.3 million from GBP107.8 million.
Hyve currently expects to run 96 events in financial 2020, ending September 30. In the first half of the year, 45 events were held, leaving 51 events to take place in the second half. To date, the company has cancelled 13 events slated in financial 2020, with these events having contributing GBP25 million in financial 2019.
Furthermore, Hyve has postponed 18 events scheduled in financial 2020 into financial 2021, with these events having contributed revenue of GBP21 million in financial 2019.
The company has suspended its dividend payment and plans to keep future payouts under review.
Hyve Chief Executive Officer Mark Shashoua said: "Whilst the immediate impact of temporary government restrictions has been severe, we believe these are short term challenges. Our strategy of building a portfolio of market-leading events and the investment made over the last three years puts us in a strong position when we exit this crisis".
By Tapan Panchal; [email protected]
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