Distribution contract terminated after alleged breach of contract

Sprue Aegis is taking legal advice after BRK Brands Europe terminated its distribution agreement claiming the company had committed a breach which “severely damages BRK”.

The home safety products supplier is now going to delay publishing its 2017 financial results, which were due next week, until it has been able to assess the impact of the termination.

Investors have shown their concern with the company’s share price falling 23% in early trading to an 18-month low.

Coventry-based Sprue Aegis had an agreement with BRK since 2010, but had announced last March that it had received 12 months’ written notice. The latest move by BRK claims the alleged breach by Sprue is “not curable” and that BRK shall not be purchasing any stocks of unsold products.

Sprue had been paying the fixed BRK annual distribution fee of £2.9m which gave it the right to distribute BRK’s products and brands in Europe.

Sprue will now work out the value of the stocks of unsold products before updating the stock market.