Simon Ashcroft says disappointing update does not mean a sale.
Abbeycrest executive chairman Simon Ashcroft has denied market speculation that the jewellery business that owns Brown & Newirth could be up for sale.
The sale speculation has arisen after Abbeycrest released an update warning of difficult trading since March and an urgent necessity to cut a larger amount costs than previously thought.
Ashcroft told Professional Jeweller: “This [talk of Abbeycrest being sold] is total speculation and a conclusion that only someone who doesn’t know the business could draw. While it is a theoretical possibility and while we are looking at a number of options, selling the business is not one of them.”
The interim management statement released on Friday blamed Abbeycrest’s recent poor performance on metal prices and retailers failing to place orders.
The statement said: “Whilst the group made a satisfactory start to the current financial year, its recovery has been further impeded in recent weeks by difficult trading conditions, including continuing rising precious metal prices and retailer action to protect volumes.”
Abbeycrest agreed revised and extended facilities with its lenders in the UK and Thailand in May but the company is now claiming that it needs to “extend these existing facilities further or reduce the group’s peak working capital funding requirement by approximately £0.7m in October 2011”.
Ashcroft said that the jump from reducing the group’s peak working capital funding requirement by £400,000, as stated previously, to £700,000 simply reflected the rising price of gold. He added: “We have very supportive bankers and there has been little change from the year end, but we are very sensitive to the gold price which is why £400,000 has become £800,000.”
On the news of the update Abbeycrest’s shares took a tumble. Shares fell from 1.5p on the day before the announcement to a day-low of 0.675p before sharply rising in the early afternoon before