Entertainment business raises six-figure sum through share subscription
York-based entertainment design, production and fit-out business has raised £150,000 through a share subscription which will be used for working capital.
The listed firm this morning said the subscription of 18.7m ordinary shares was undertaken by certain members of the board, a manager and an existing shareholder known to the company. It represents 9.99% of the existing share capital of Paragon.
The funds raised from the subscription will be used for general working capital and to increase the company’s headroom against its on-demand facility with HSBC.
It follows a trading update last week, when the firm announced it was to lower its financial expectations. It now expects to report revenues of between £8.8m and £9.2m; reduced from the range of between £9.5m and £9.8m it previously announced.
It also expects to make pre-tax losses of between £2.5m and £2.7m; deepening the losses it previously expected to be stood at £2.4m.
Paragon said the revised numbers remained subject to the completion of the FY2018 audit process. It said the pre- tax losses were stated after accounting for the bad debt of £168,000 we disclosed in February.
The York firm completed a restructure in 2018. In January, Paragon said it was on track to see a return to profitability this year.
In February, Paragon Entertainment completed the sale of its freehold property at the Elvington Industrial Estate, York for £550,000 in cash. The site housed its administrative functions and the activities were relocated to the company’s closely adjacent site in York, bringing the administrative and creative parts of the business onto a single site. It said this move yielded modest operational cost savings of £100,000 on an annualised basis.
At the time, Paragon said that the proceeds of the disposal would be used to reduce the level of the company’s on-demand overdraft facility with HSBC and pay off the mortgage facility which stood at £134,000.
