10th May 2018 12:35
LONDON (Alliance News) - Shares in home safety products firm Sprue Aegis PLC rose Thursday after it said it has reached an agreement in a dispute with a partner dating back to 2010.
The stock was trading at 126.95 pence each on Thursday, up 15%.
The dispute was with smoke alarm company BRK. In 2010, Sprue Aegis agreed to exclusively distribute BRK Brands Europe Ltd's products, which was extended for three years in April 2015.
However, in March last year Sprue Aegis got notice from BRK for a termination of the deal as well the ending of an obligation to pay the annual distribution fee of GBP2.9 million.
However, a year later BRK alleged Sprue Aegis had breached the agreement causing it "severe" damage, and also said it would not purchase any unsold products following the termination of the deal.
Sprue Aegis consulted lawyers concerning the termination notice, and thus was not able to publish 2017 results in late March as planned.
As part of the agreement announced Thursday, BRK is to buy back all BRK inventory made from the start of January for GBP1.0 million through a deduction in payments due from Sprue, except for 3,097 units required by Sprue for warranty purposes.
Sprue is to sell all BRK inventory made before 2017 at its own cost, and BRK has approved the sale by Sprue of excess stock of Sprue's carbon monoxide alarms using BRK's brands valued at GBP300,000 for six months.
Sprue is also to pay GBP11.0 million in outstanding payments owed to BRK by late December.
Executive Chairman Graham Whitworth said: "I am pleased to announce that we have reached agreement with BRK following the termination of the DA and MA, which deals with all outstanding matters and enables us both to move on with our respective businesses without the risk of legal claims."
Results for 2017 are now to be released on Tuesday next week, and will include a GBP3.8 million exceptional charge related to the BRK dispute.