Laird confirms £185m rights issue, posts 30% drop in FY profit
Electronics components maker Laird, whose shares tumbled back in October after a profit warning, has announced a fully-underwritten rights issue to raise around £185m in gross proceeds to reduce its indebtedness.
The company is offering a 4 for 5 rights issue of more than 217.1m new shares at 85p each, which is a discount of 51.4% to the closing price on Monday.
Chief executive Tony Quinlan said: "The rights issue announced today will allow the company to reduce gearing in line with the medium term capital structure target set out in the December trading update.
This strengthened balance sheet position will provide us with the foundations necessary to be able to return the company to growth, enabling us to continue to invest in our ongoing operational improvement initiatives whilst also leaving Laird well placed to invest in future growth opportunities and take advantage of the strong underlying trends we see in many of our key end markets."
Laird also released its results for the 12 months to the end of December, with underlying pre-tax profit down 30% to £51.1m.
Revenue was up 27% from the previous year on a reported basis to £801.6m, but on an organic constant currency basis, it was down 0.4%.
Group underlying operating profit fell to £61.9m from £80.7m as it was hit by weaker sales and margin pressures in the Precision Metals business, a challenging environment for the WACS business and the losses related to the Novero acquisition during the initial operational and financial turnaround period.
In light of the rights issue, and as previously announced, Laird said it does not intend to pay a final dividend for 2016.
At 1050 GMT, the shares were down 2.7% to 170p.