27th Feb 2019 13:16
LONDON (Alliance News) - Walcom Group Ltd on Wednesday said that trading in the first two months of the year has been "significantly below budget", due to slower growth in the Chinese economy and a negative impact on revenue from the African swine fever.
The animal feed additive producer added that it received GBP22,573 to settle payments which were owed to it from an unnamed largest customer.
Walcom, however, is still owed GBP537,233 from the customer and is therefore still pursuing legal proceeds against the customer.
As a result of both the lower revenue and the debts, Walcom's working capital position is "severely
constrained" and the company will not be able to meet its liabilities by March 2019.
"The company is taking all possible steps to mitigate this position by means of cost savings, negotiating with suppliers on extended payment schedules and other actions the company could take to generate additional cash resources," Walcom said.
It added: "The actions outlined above are subject to a number of variables which are not wholly within the company's control. In the event that the company is unable to address its working capital shortfall, the company may be unable to continue its operations and may be forced into liquidation with a consequential diminution in value to shareholders."
Walcom shares were untraded at 0.475 pence each.
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