Announcement
MKTUPDTE: SEA: SeaDragon provides Guidance and Business update
12:21pm
SEA
15/04/2020 12:21
MKTUPDTE
PRICE SENSITIVE
REL: 1221 HRS SeaDragon Limited
MKTUPDTE: SEA: SeaDragon provides Guidance and Business update
SeaDragon Limited (NZX SEA) wishes to provide the market with the following
update regarding an early indication of the unaudited financial year end
results and a Board decision to undertake major changes to SeaDragon's
operations, including governance and other costs.
Financial year end 30 March 2020:
SeaDragon will release its audited financial results in June 2020, however
after an early review of management accounts the company will produce a
normalised EBITDA loss of approximately $4.9m which compares to last years
normalised EBITDA loss of $5.2m. This result is subject to audit that will be
carried out during the months of May and June 2020.
Funding:
As a consequence of these ongoing losses funding continues to be a major
concern for the business. As communicated on 18 February 2020 Pescado had
committed a further unsecured loan of $1,000,000 which provided a bridge
until further capital raising activities were undertaken. This bridging
finance is due for repayment no later than 18 August 2020. Directors will
continue to review options for providing additional cash to the business and
will update the market as required with progress.
Major Changes to the Company:
The SeaDragon Board has decided that, given these ongoing losses and the
current operating environment, there needs to be a concerted effort to get
the business to a positive operating cashflow as soon as possible. As a
consequence, the company will, with immediate effect, commence a cost
reduction strategy where it will, seek to dramatically reduce operational,
compliance, governance and other costs.
This cost reduction strategy will require significant changes within
SeaDragon's Nelson based team, and these discussions have recently commenced
with all team members.
The SeaDragon plant continues to operate as an essential service supplying
infant formula producers, but the number of future customers serviced will be
restricted to only those able to meet SeaDragon's gross margin criteria.
Compliance and governance costs of being an NZX Main Board listed entity are
significant and the SeaDragon Board has decided that, subject to discussions
with NZX and the Unlisted Securities Exchange (USX), it intends to seek
shareholder approval to delist from NZX and become an unlisted company
trading on USX. To this end SeaDragon intends to hold a virtual special
meeting of shareholders as soon as practicable. Full details of the approvals
sought will be outlined in the relevant notice of meeting, which will be sent
to shareholders once discussions with NZX and USX are completed.
With immediate effect and for the foreseeable future the CEO's income and
directors' fees will be reduced by 33.33%. SeaDragon also expects to address
the composition of the Board as part of the delisting process.
Financial results announcement and annual report timing:
With the disruption to year end accounting and audit practices caused by the
Covid-19 Alert Level 4 lock down in New Zealand, SeaDragon has elected to
rely on the class waiver granted by NZX Regulation on 3 April 2020 (the "NZX
Waiver") for the delayed announcement of its financial results and the class
exemption announced by the Financial Markets Authority on 3 April 2020 and
the NZX Waiver for the delayed release of its annual report. SeaDragon
expects to announce its financial results in June 2020 and to release its
annual report towards the end of August 2020.
For further information, contact:
Bryan Mogridge
Chairman
Tel: +64 21 931 355
About SeaDragon: www.seadragon.co.nz
SeaDragon Limited (NZX:SEA) is New Zealand's largest refiner and blender of
high-quality, internationally certified concentrated fish oils and fractions,
including Omega-3 oils. Our oils are sourced from fish caught in the clean
and pure waters around New Zealand, in the Southern Ocean, and elsewhere. We
have more than 20 years' experience processing fish oils and we are
recognised for the quality and purity of our products. We supply health
supplement manufacturers around the world to meet the burgeoning demand for
pure, high-quality fish oils, which are scientifically proven to deliver
significant human health benefits such as lowering the risk of heart disease,
improving brain function and joint health. The maj
End CA:00351681 For:SEA Type:MKTUPDTE Time:2020-04-15 12:21:16
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