1st Dental ‘working hard’ to bring in capital
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- Published: Sunday, 26 September 2010 20:08
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| Trading in shares in the dental laboratory firm 1st Dental have been suspended and the company placed in administration just weeks after announcing its first profit in three years. Chairman Grahame Sewell said: ‘We are working hard to bring in capital and take the company out of administration.’ In a statement to the stock market, the company's directors revealed Harrogate-based 1st Dental had ‘come under severe pressure from HMRC and other creditors in recent weeks’. |
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While the results for the half year to May 31 2010 were "satisfactory" overall, the directors said that the group and its key customers had experienced weaker demand in recent months. The failure of September revenues to live up to expectations after slow summer months had left the company struggling to meet its financial obligations. The company, which employs about 220 staff, including 97 registered dental technicians, had expected business to pick up this month after the typically slow summer months, but trading has failed to recover.
Although 1st Dental made a profit in the first half of the year, trading was difficult, with a decline in more discretionary private dental work over recent months amid the uncertain economic environment. However, the company said that the decision to appoint administrators had given the company a window of opportunity to meet creditor obligations "as far as possible in due course".
A statement from the company said: “We are working hard to bring in capital and take the company out of administration. As expected, the months of July and August were soft months from a revenue viewpoint. However, there has been no evidence of any significant increase in revenues in September, which traditionally is a stronger month for revenues. It is expected that revenues for September will be well short of internal budgets.’
The statement continued: "The directors have taken advice from insolvency experts to look at the options for the group, given the overall worsening of the market situation and the financial position of the group and have considered possible methods of refinancing the group. The directors have also taken into account that there appears to be little likelihood of trading conditions improving in the near future.
"Further, the business model limits the immediate impact that any sales actions might have, given the nature of the group’s activities, being to meet demand from dentists arising from patient visits. Therefore, the directors have reluctantly come to the view that the group is in danger of trading while insolvent, and cannot raise additional funds within the short term and have consequently decided to appoint an administrator."
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