Bilby Plc, a leading gas heating, electrical and building services provider, announces the following trading and operational update.
Further to the announcement on 5 March 2019, the Board continues to expect to report positive underlying EBITDA of between £2.0 to £3.0 million for the year ending 31 March 2019.
The Board has been engaged in a comprehensive operational and financial review of the business that has accelerated with the appointment of David Bullen as Chief Executive Officer in April 2019. This review remains ongoing. However, initial work undertaken as part of the review has conclusively established that the Group's loss-making activities have been isolated to historical management failings in the Group's subsidiary company, P&R where, as previously announced, the Group has been materially impacted by two major contracts (the "Disputed Contracts"). Further information on the Disputed Contracts is set out below.
In July 2019, the Group closed P&R's gas servicing division and restructured all ongoing profitable building services contracts to be serviced under the management responsibility of the Group's subsidiary Purdy. This action has eliminated the losses from the division.
The other four businesses within the Group continue to trade in line with management expectations and the Board remains confident in their outlook.
As previously reported, the Group terminated P&R's contract with Amey to provide building services to Ministry of Defence properties in May 2018. The major gas contract with East Kent Housing was also terminated by the Group in April 2019. The Group initiated formal resolution proceedings with both organisations to recover disputed money owed. Bilby continues to vigorously defend its position in relation to services provided and work undertaken and invoiced in respect of these Disputed Contracts. However, any outcome will be finalised through an independent adjudication process. The Board anticipates material restructuring costs and write offs associated with the Disputed Contracts for the year ended 31 March 2019. The Group has recently received part payment from one of the Disputed Contracts.
As a consequence of the ongoing resolution proceedings related to the Disputed Contacts and with the intention to report in more detail on their outcome, Bilby now anticipates releasing its financial results for the year ended 31 March 2019 in early September 2019.