Fulcrum remains on track as it amends loan facility

6th Apr 2023 15:20

(Sharecast News) - Fulcrum Utility Services said in a trading update on Thursday that it remained on track to meet the performance expectations outlined in its October trading update.

The AIM-traded firm said it had been working to address issues, and develop a clear strategy to capitalise on opportunities in its markets, having identified several opportunities and operational improvements as part of its ongoing strategic review.

It said it had decided to exit the smart metering market due to changes in market dynamics, which the board no longer considered an attractive opportunity.

The company was planning to focus on more attractive opportunities in other areas of its operations.

Interim chief executive officer Lindsay Austin would continue in her role for a minimum of six months to lead the company and oversee the strategic review.

A new, leaner senior leadership team had meanwhile been formed, the board said, and tasked with delivering the company's plans.

Fulcrum also announced an amendment to its convertible loan facility agreement, increasing the provision of funding by £5m to provide up to £11m of principal.

The directors said the amended facility would support the ongoing strategic review and ensure it had adequate working capital.

Bayford, a substantial shareholder, had indicated that it would also provide financial support beyond the term of the amended facility if required.

Fulcrum said it was confident that the amended facility and the financial support from Bayford would provide it with the needed funding for the trading year ahead, and support the continued execution of its strategy and journey back to profitability.

"The board and I are pleased to confirm that the group's full year performance will be in line with expectations," said chair Jennifer Babington.

"Turning the group's performance around is an ongoing and challenging task, but we are making positive progress as we implement a clear strategy that puts the group on a path back to profitability.

"We are also pleased to confirm the continued support from our major shareholders as we execute our plans and move the business forward."

Babington said the board saw the support as "a clear indication" of its shareholders' confidence in Fulcrum and its return to profitability.

"The group's future is also supported by medium to long-term market fundamentals, which remain strong.

"This, coupled with the improvements we are implementing, means that the group continues to be ever better positioned to capitalise on the long-term opportunities presented by the UK's transition to a low carbon economy."

At 1235 BST, shares in Fulcrum Utility Services were up 2.44% at 1.05p.

Reporting by Josh White for Sharecast.com.