1 October 2009
INTERBULK GROUP PLC
PRE-CLOSE TRADING STATEMENT AND BANKING UPDATE
InterBulk Group plc ("InterBulk" or the "Group") (AIM:INB), the global
intermodal logistics solution provider to the chemical, polymer, food and
minerals industries, is pleased to provide a trading update for its financial
year ending 30 September 2009 and to announce the successful conclusion to
discussions with Lloyds Banking Group.
Pre-Close Trading Statement
We expect our full year results, before exceptionals, to be in line with
current market expectations. Exceptional items for the second half year will
include the previously announced impact of Artenius UK Limited entering
administration and the cost of establishment of revised banking facilities as
described below. We continue to take the prudent view of assuming no positive
outcome from the Artenius Administration process and that the plant will remain
closed.
Business performance in the 12 months to 30 September 2009 has been encouraging
especially in light of the current economic environment, which greatly impacted
our European customer base in Chemicals and Plastics and resulted in lower
activity levels for the total group than in the previous year. Considering the
circumstances, our Liquid Bulk business has performed well. The global and
diverse nature of this business area provides the Group with a robust platform
for growth. The Dry Bulk business, which today mainly serves the European
polymer industry, has been adversely affected by the fall off in demand and the
increasing imports from new capacity in the Middle East.
In the second half of the year, activity levels in our Dry Bulk business have
stabilised and we are pleased to report that the Liquid Bulk business has seen
growth on the back of the important business wins that we reported in our half
year announcement. General over-capacity in the logistics market caused by
demand downturn exerted some pressure on margins and we have responded by
keeping a tight control of our cost base.
We note that throughout this difficult period the group's high customer service
levels are being maintained. High service levels and our ability to provide
customers with a solution oriented approach will bring further success.
Banking
As reported at the half year, we have met all debt obligations and covenants.
Looking at the future and taking the volatile business climate into
consideration we felt it was appropriate to enter into early dialogue with
Lloyds Banking Group, the Group's principal bankers, to better reflect the
current global economic conditions in our facility terms. We are pleased to
report that InterBulk has signed a revised banking facility agreement which
fully reflects the current and expected economic conditions and their impact on
the company's markets, while providing adequate headroom to allow the business
to execute effectively its medium term growth strategy. Key changes to the
total banking facilities of £95.2m are as follows:
* £33m of debt is reclassified to a subordinated mezzanine instrument which
has a non-cash paying interest margin of 12% repayable in full along with
the principal value on 30 September 2012.
* Remaining term debt will have capital repayment limited to £9m in the three
years to 30 September 2012 when a final bullet repayment will also be due.
* Arrangement fee of £1.4m, of which £0.9m of this is deferred until 30
September 2012.
* Equity warrant instrument to be issued in favour of Lloyds Banking Group
for 15,144,600 shares, being 5% of currently issued share capital, with an
exercise price of 10 pence.
Taking all aspects into accounts, the Directors believe this represents a
successful and favourable outcome for the Group and its shareholders. While the
additional non-cash interest expense is material, being equivalent to
approximately £2.5m next year, and will reduce the Group's EPS expectations in
the short-term, the revised structure will allow the business to focus on the
creation of shareholder value over the next three years.
Koert van Wissen, Chief Executive said: "The full year performance has been
strong in a challenging market place. The objective of obtaining a secure bank
funding position has now been achieved and will allow the business to focus on
the successful execution of our stated strategy for growth. Business sentiment
has seen signs of improvements recently, but due to the expected slow recovery
of the demand and overcapacity in the overall logistic resources we believe the
next year will remain challenging. However, our robust variable cost business
model, solution oriented approach to our customers and our strategy to
diversify our business both in geography and customer base provides a sound
platform for the future."
For further information, please contact:
InterBulk Group plc Tel: 01355 575 000
David Rolph, Chairman
Koert van Wissen, CEO
Scott Cunningham, Finance Director
Dowgate Capital Advisers (NOMAD) Tel: 020 7492 4777
Lindsay Mair, Antony Legge
Arden Partners Tel: 020 7398 1600
Chris Hardie
Buchanan Communications Tel: 020 7466 5000
Charles Ryland, Jeremy Garcia, Ben
Romney