26th Apr 2016 08:09
LONDON (Alliance News) - Snoozebox Holdings PLC on Tuesday warned it made a wider loss than previously expected in 2015, while revenue in 2016 will decline after it failed to secure new customers, meaning the company may be unable to continue if it doesn't receive financing from its lender.
Shares in Snoozebox were trading down 56% at 0.482 pence on Tuesday morning.
The portable hotel company said it now expects to report an adjusted earnings before interest, tax, depreciation and amortisation loss of around GBP5.5 million in 2015, wider than the GBP5.0 million loss it had predicted in November, and also wider than the GBP3.6 million loss it posted in 2014.
Snoozebox had net debt of GBP5.4 million as of the end of 2015, but this has fallen since to GBP1.9 million as of the end of March.
Snoozebox also warned that revenue for 2016 will decline in the absence of securing new customers in the year so far.
Revenue from semi-permanent hotels in the first quarter of 2016 was broadly as planned, Snoozebox said, arising from existing contracts secured in prior years. However, the major Falklands contract is expected to cease generating revenue in May. Following this, the group will have one lower-margin semi-permanent contract for 80 rooms with a customer in the UK, which is subject to renegotiation in the second half of 2016.
Lead times to secure new semi-permanent contracts in 2016 are proving to be longer than planned, with planning completion dates delayed further into the year, or beyond, meaning revenue is likely to decline as a result, unless new customers are secured quickly, Snoozebox said.
"The board believes that the group has sufficient working capital in the short term to complete its review of the business and commence the execution of a revised strategy focused on securing new customers for the semi-permanent room stock," Snoozebox said in a statement.
"There can be no certainty that plans to secure new customers on suitable commercial terms will be successful nor that negotiations with the group's primary lender will be successful and, as a result, the group may be unable to continue as a going concern," Snoozebox warned.
On Monday, Snoozebox had revealed that Chief Executive Officer Lorcan O Murchu had resigned from the board with immediate effect, with current Non-Executive Chairman Chris Errington becoming executive chairman on a part-time basis.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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