Lb-Shell Loss Narrows In 2017 But Says Outlook Remains Uncertain

29th Mar 2018 12:30

LONDON (Alliance News) - Lb-Shell PLC on Thursday reported a narrowed loss, but said there "significant" doubts about its position after having disposed of its revenue-generating subsidiary.

The power technology company booked a pretax loss of GBP12.7 million for 14 months ended November 30, significantly narrowed from GBP225.2 million for 12 months to the end of September 2016.

The group highlighted that despite entering reported financial year with a more streamlined and cost efficient structure than in previous periods, 2017 was "difficult and disappointing", as company struggled to generate revenue.

Lb-Shell recorded a cash burn of GBP1.6 million per month, with its cash balance of GBP20.6 million as at October 1, which it called "not sufficient" to fund it through to expected positive free cash flow from organic product sales.

On October 25, Lb-Shell decided to sell its main subsidiary, Intelligent Energy Ltd and all remaining assets to Meditor Energy Ltd for GBP19.5 million, due to a bleak outlook. Meditor completed the takeover less than the month before the company exhausted its cash reserves.

The group said that it will use the consideration to settle a convertible loan note, and will arrange for the cancelling of its shares on the London Main Market, expected in 20 business days after the cancellation is formerly announced.

However, the company now said that it identified a viable continuation option, which could provide more value for shareholders than a wind down. The restructuring process is expected to be completed under new board of directors, it said. So far, the business has not begun restructuring, and there remains a risk that suitable terms will not be reached, it said.

Looking ahead, the company said that due to uncertainty, it continues realising its assets and discharging its liabilities in the normal course of business.

The stock was up 71% at 0.32 pence per share on Thursday.