Superficially, there is an impressive gap between the company’s market capitalisation, £12.5m, and property assets of £54.7m. But before getting carried away we need to consider whether the company is vulnerable to failure because of its debt levels and covenants on those loans.
Net bank borrowings fell between 31st March 2020 and 31st March 2021 from £16.1m to £10.3m, so that is encouraging. The makeup is £5.7m of cash and £16m of borrowing. Debt facilities have been agreed with HSBC and VW Bank:
Debt outstanding at March yearends 2021 - 2018 £m 2021 2020 2019 2018 Current 3.9 8.9 4.9 1.4 Non-current 12.2 8.7 12.6 13.1 Total debt 16.1 17.6 17.5 14.5 Less cash -5.7 -1.5 -3.9 -2.2 Net debt 10.3 16.1 13.6 12.3Preliminary results to 31st March 2021: “This substantial reduction [in bank debt over the year] reflected the strengthened controls over working capital and cost savings implemented during the year, as well as the significant covid-19 support received by the Company from the Coronavirus Job Retention Scheme and the business rates holiday.” Covenants The VW term loan and the HSBC debt, are subject to covenants tested with respect to:
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Glen ArnoldI'm a full-time investor running my portfolio. I invest other people's money into the same shares I hold under the Managed Portfolio Service at Henry Spain. Each of my client's individual accounts is invested in roughly the same proportions as my "Model Portfolio" for which we charge 1.2% + VAT per year. If you would like to join us contact Jackie.Tran@henryspain.co.uk investing is about making the right decisions, not many decisions.
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