LONDON (Alliance News) - Engineering company Hightex Group PLC saw its shares slide 37% Monday morning after it posted a widened pretax loss on nearly halved revenue in 2013, hit by operational problems at its Brazilian joint-venture company.
The company posted a pretax loss of EUR2.8 million, widened from EUR1.1 million, as revenue dropped to EUR9.9 million from EUR17.2 million. Hightex said receivables from its Brazilian joint venture have been cast into doubt due to difficulties in obtaining financial information.
A majority of the company's revenues were earned from contracts in Brazil, working on stadiums ahead of the 2014 World Cup in June. The company said that it had made a provision for its Brazilian receivables. As a result of this uncertainty, the company's working capital position has been threatened.
In order to counter this, the company said it opted to sell a majority 50.15% stake in its thermal cooling business SolarNext AG during 2013, and signed a loan facility with TCA Global Credit Master Fund LP for up to USD10 million in February.
Hightex said that to improve corporate governance over the Brazillian joint venture, SEPA Hightext Coberturas Ltda, it has changed its representative director at the business.
SolarNext saw revenues of EUR209,000, down from EUR534,000, hit by cold weather in continental Europe and uncertainty over the governmental energy policy in Germany. Hightex said that in the early weeks of 2014 the business saw a major recovery in sales, and the business has already taken orders with a higher value than its total revenues for 2013.
Hightex said that 2013 had been a "most difficult year", but was nonetheless positive that the final game of the World Cup will take place under a roof produced by the company.
The company said that it is looking to strengthen its balance sheet, and potentially would identify a partner with "appropriate financial strength which would complement the well-recognised, innovative construction engineering skills for which [Hightex] is renowned."
Hightex has submitted tenders for several projects, it said, giving it cautious optimism for "one or more contract wins in the second half of 2014."
Shares in Hightex were trading down 37% at 0.300 pence Monday morning, the biggest faller on AIM.