Surgical Innovations Group plc
(the "Company" or the "Group"))
Bank Covenant
The Board has undertaken a review of forecasts for the Group for the financial year ending 31 December 2015.
As announced in the final results on 11 May 2015, the Board has been focusing on cash flow generation, particularly through a process of substantially reducing inventory levels. This approach has shown some success and the cash position has improved since the year end. However, also as referred to on 11 May 2015, destocking in this way has a direct, negative impact on profitability as recoveries through manufacturing are reduced.
The Company currently has a term loan of £3 million from Yorkshire Bank which is repayable in April 2017. After taking account of cash balances, net indebtedness to Yorkshire Bank was £1.54 million at close of business on 29 June 2015. The term loan carries a number of financial covenants, including a profitability covenant requiring EBITDA (earnings before interest, tax, depreciation and amortisation) of a minimum of £600,000 for the year ending 31 December 2015 (the "EBITDA covenant").
The Board is now of the view that the Company is unlikely to be able to meet the EBITDA covenant and is therefore commencing formal discussions with Yorkshire Bank in relation to this matter. Further announcements will be made as appropriate.
ENDS
For further information please visit www.sigroupplc.com or contact:
Enquiries:
Surgical Innovations Group Plc
Doug Liversidge, CBE
Non-Executive Chairman
Tel: 07798 892 918
WH Ireland Limited (Nominated Adviser and Broker)
Tim Feather / Liam Gribben
Tel: 0113 394 6600
