Losses double as technology business says recovery plan will ‘take some time’
Technology business FireAngel has warned it will “take some time to recover” as the new management team look to turnaround the struggling business.
The Coventry-based fire and smoke alarm supplier faces a “material uncertainty” after exiting a contract and said it may need to revisit its banking covenants, which were waived then reset earlier this year.
Chairman Andrew Blazye and chief executive Neil Radley joined in June after a £6m fundraising was completed to lead a recovery.
FireAngel has today reported it made a £4m loss in the sixmonths to June – more than double the previous year. This was caused by a big fall in international sales which resulted in a 16% drop in revenue to £21.4m.
Radley said: “Whilst every effort is being made to mitigate the impact of the momentum lost across the group in H1 2023, it will take some time to recover.
“The company will continue to build on the progress made since June 2023 as the board seeks to refocus the group and expects to see the benefit of further cost management initiatives in Q4 2023 and into 2024.”
As well as replacing the chairman and chief executive, the company’s chief product officer, sales director, product delivery director, and a non-executive director have also left.
FireAngel has terminated a manufacturing supplier contract as part of its “right sizing” and reduced its inventory from £10m to £8.5m in three months.
However it warned that while the exit “is seen as beneficial to the business in the medium term, due to the timing of the notice it is too early to quantify the complete costs of exit”.
The company has said this produces “a material uncertainty” to its future cash forecasts.
FireAngel’s bank had already waived the banking covenants in the first quarter of the year and reset them from June. The company has acknowledged the need to “potentially revisit our banking covenants” should its cash headroom prove to be insufficient in the coming months.