Trafford-based printing company, Grafenia, has put in place a facility to issue up to £50m of perpetual bonds.
So far it has issued £3m of them at a nominal value to investors, raising around £2.01m.
The company stated that the proceeds were for “general working capital” and to support its acquisition strategy. This was first revealed in March, as the print group issued a call for “otherwise sustainable” companies which were struggling during Covid-19.
“We’ve been open and transparent about our acquisition strategy, to roll up the signs sector,” said Peter Gunning, CEO of Grafenia plc.
“Since the start of the pandemic, we’ve had many discussions with sign businesses. Depending on their product mix, some have been affected by the crisis more than others. People are contemplating what the future looks like and are considering their options. We’re seeing potential opportunities to grow our network. We like the mechanism of the bond. As we see future attractive acquisition opportunities, we can access capital as necessary. We did consider raising equity, but the Board decided that this bond was better for shareholders as it’s not dilutive.”
In a trading update, the group said that it had been impacted by the pandemic, as March through to May are usually boosted by events and exhibitions. Its Nettl stores have also been closed during the lockdown.
However, it said that its production hub had remained open and it furloughed around half of its team.
In March, its overall revenue was 65% of the previous year. In April that fell to 30%.
Sales climbed in May as it started developed new product lines, including floor stickers, branded facemarks and sneeze guards. By June, its sales were 90% of the previous year.
“The pandemic has put significant pressure on our transformation plan. With the executive team managing the business tremendously well, we are increasingly seeing opportunities to start playing offense,” added Jan Mohr, Chairman of Grafenia plc.