Accounts remain delayed as legal claim rumbles on
Nearly one month after revealing it was taking legal advice after a major contract was terminated, home safety products supplier Sprue Aegis remains in discussions about resolving the problems.
BRK Brands Europe terminated its distribution agreement claiming Coventry-based Sprue Aegis had committed a breach which “severely damages BRK”.
An agreement had been in place since 2010, but in March 2017 Sprue received 12 months’ written notice. Days before the notice period ended, BRK claimed a breach by Sprue that was “not curable” and that BRK shall not be purchasing any stocks of unsold products.
The gross book value of the disputed stock of unsold BRK products was £4.3m at March 31.
Sprue Aegis said: “Whilst discussions with BRK continue, the company is unable to confirm the expected date for release of its audited final results for the year ended 31 December 2017.”
Investors have shown their concern, with Sprue’s shares trading nearly 30% lower than before BRK issued its termination notice.
The manufacturer reiterated that it “disputes the allegations made by BRK” and continues to take legal advice.
It has also revealed that on March 29 it drew down £3.0m of a £7.0m revolving credit facility with HSBC Bank that was put in place earlier this year.