Harrington seeks rescue after pounds 5m losses
Wednesday 05 July 1995
Harrington Kilbride, the publisher teetering on the edge of failure, yesterday announced 1994 losses of more than pounds 5m and said it would call a shareholders' meeting to discuss a recapitalisation plan.
The company's bank, National Westminster, is to provide credit facilities until the end of August, to give management time to develop its rescue plan.
The company plans to send a notice to shareholders announcing an extraordinary general meeting, scheduled for July, at which a new share issue will be proposed.
Ian Fletcher, chief executive, said he would invest additional personal funds as part of the recapitalisation plan after yesterday finally announcing the 1994 results, which were originally expected on Friday. Dealings in the company's shares were suspended at 30.5p on Monday pending yesterday's announcement.
Mr Fletcher, who joined the company in March, investing his own capital, said he planned to concentrate on contract publishing rather than in-house publications.
He added that "selective" expansion of the business would follow, once the company returned to profit.
Harrington Kilbride's former managing director and founder, Kevin Kerrington, and the former finance director, Keven Austin, who both resigned last month, will receive compensation, it was also announced.
Trading problems came to a head in 1993, following a rapid expansion into eastern European markets. Bad debts quickly accumulated when advertisers contracting for space in the company's magazines failed to pay, leading to sharp losses and a plummeting share price.
Losses totalled just over pounds 1m in 1993, on sales of pounds 21m. The results had to be restated three times as the extent of the bad debts were clarified, and the company's auditors and brokers both subsequently resigned. Last year, losses reached more than pounds 1.3m in the first half, but the company had hoped to offset the poor figures through improvements in the second half.
Costs have since been cut and operations rationalised across the board, the company said. "The board believes that it now has control over the operations of the business and that the company has significant long-term potential, provided it is managed with that in mind," Tony Herron, company chairman, said.
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