FireAngel looks to reduce debt through £6m fundraise
FireAngel, the developer and supplier of home safety products is looking to raise £6.1m in an effort to reduce its net debt.
It also has embarked on a strategic review to “explore options to realise value for shareholders… which may or may not involve a sale of the company”.
It added that it is not in discussions with any potential offerer and has not been approached.
The Coventry firm has approved the details of a placing, subscription and open offer to reduce debt to £2.8m and support its increased working capital and investment requirements as it looks to grow.
It’s revealed there have been contractual commitments made by some existing shareholders, new investors and a subscriber by means of a placing and subscription of up to 120,711,091 new ordinary shares.
The subscriber, Ningbo Siterwell Electronic Import & Export Co., a long-term manufacturing partner, has agreed to subscribe for 55,322,431 ordinary shares of 2 pence each for £2.8m subject to clawback by shareholders under the open offer.
Several board changes have also been made with Andrew Blazye (ex-Chair of Universe plc) to be appointed as Non-Executive Chairman and Neil Radley (ex-CEO of Universe plc) to be appointed as CEO both with effect from tomorrow (June 7). John Conoley stepped down as Executive Chairman yesterday (June 5).
FireAngel delivered its highest revenue performance last year since 2017.
It saw revenue growth of 32% to £57.5m despite struggling with supply chain issues and reported a gross profit of £10.1m.
The firm said its numbers had been adversely impacted by purchase price variance, unprecedented currency swings, inflation, and supply constraints on especially higher margin connected products.
FireAngel saw a loss before tax £6.1m (2021: £3.7m) and admitted that its results were not what it set out to achieve.
Zoe Fox, Chief Finance Officer of FireAngel, commented: “Despite unprecedented macro circumstances, FireAngel has delivered its strongest revenue and adjusted gross profit result since 2017, with the progress made by the Group in the last two years underpinning this performance.
“Whilst the reported result announced today was not what we set out to achieve, the self-help measures implemented over the course of the year have supported an underlying performance that better represents the strong progress made in 2022.
“We continue to see growing demand for our safety products, driven by societal and regulatory changes. Although trading in 2023 remains challenging, particularly in the UK Trade market, the Board is confident that FireAngel is continuing to deliver significant self-help measures, which are expected to underpin a further improved performance in 2023 and beyond.”
New contract wins were announced in March with British Gas Services and in May with a government agency in the Middle East.