Bagir sees revenues rising, new date agreed for takeover by Shandong Ruyi
London-listed US/UK-focused formalwear tailor Bagir battled through a “challenging retail and political backdrop” to deliver strong sales and a return to core profits in its latest results for the six months ended 30 June.
In a “steady trading performance”, revenues jumped 32% to US$32.8m, driven by increased sale orders from existing customers. It also said sales to 19 September were $46m, supported by an order backlog of $20.1m.
There was a modest turnaround too in its core earnings with adjusted EBITDA of $1m compared to a loss of $1.7m a year ago. The pre-tax loss was cut to $1.05m from a loss of $3.6m last time. Gross margin improved dramatically to 11.9% from 6.7%. General and administrative expenses were cut to $1.1m in H1 from $1.5m in the year ago- period. Meanwhile, the company said it’s on track to generate revenues in 2019 of around $59m, up from $56.4m in 2018.
"Bagir has succeeded in delivering improvements in all operational parameters,” said a pleased new CEO Micha Ronen. “Demand for the group's tailored products increased significantly, reflected in the 32% rise in revenues for the period.”
Ronen added: “We expect the market to continue to be challenging and we are in the process of taking all necessary steps to adjust our organisation to the market conditions and to better leverage our advantages in the market."
In other news, Bagir also said it has agreed a new date for completion of the much-delayed takeover transaction by Shandong Ruyi, although that date has yet to be revealed. The plans for the proposed takeover, which involves Shandong Ruyi investing $16.5m to acquire a 53.7% shareholding in Bagir, are taking time to materialise. The deal was first announced in November 2017.
“We are collaborating together to support potentially one of their clients with a large production order from Vietnam,” added Ronen.
“At the same time we are focused on developing the group on a standalone basis, operationally we see greater opportunities to exploit our innovative product ranges and to expand further into the tailored uniform market alongside the group's core business of manufacturing tailored garments to major apparel clients in the US and UK.”
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