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AEA Technology Group woes laid bare

Sustainability consultants AEA Technology Group says it could face “significant doubt” over the group’s ability to continue as a going concern.

The group’s annual financial results statement reported an “overwhelming” pension liability, an operating loss of £35.4m, and said it was considering a sell-off of “all or part of the group’s businesses and assets”.

The company, which names itself a leading technical adviser on waste to the US and UK Governments, unveiled the statement on Wednesday (1 August). The announcement follows media reports in July that the company’s stock market value had been all but wiped out after failing in a bid to expand in the US.

The statement said:  

  • The company could face “material uncertainties that may cast significant doubts over the group’s ability to continue as a going concern”
  • The group could sell off “all or part of the group’s businesses and assets” following a “challenging year”
  • The company’s pension liability has risen 38% between 2011 and 2012

Paul Golby, AEA

AEA chairman Paul Golby, left, said difficult trading conditions had made it a challenging year but added: “Nevertheless, I am extremely grateful to [staff] for their hard work, resilience and encouragement.

“Despite a robust business plan and the underlying strength and expertise of the group’s employees, the business has been overwhelmed by the growing pension liability.

“The board remains cautious in light of the challenging international trading conditions and material uncertainty over the future funding requirements of the group.”

AEA by numbers 2012

Order intake£134.1m£80.9m
Adjusted operating profit£4.1m£8.8m
Operating loss£35.4m£5.9m
Net debt of£36.4m£28.3m
Net liabilities in respect of retirement benefits£168.5m£121.8m

NB: “The financial information set out above and below for the year ended 31 March 2012 does not constitute the statutory accounts for the year but is derived from those accounts.”

Source: AEA annual financial results statement

The company said additional short term funding would allow the group to realise value through a sale of all or part of the group’s businesses and assets.

It said it hoped the group would be able to agree a “financial restructuring plan which will discharge its liabilities to the bank and the pension scheme in a solvent manner”

But it added there was “no certainty that a sale process can be completed in the short term that will enable the discharge of liabilities to the bank and the pension scheme”.

The statement added: “Should the group not maintain the ongoing support of the bank and pension scheme, and execute a financial restructuring plan that provides an appropriate solution for the bank and pension scheme and meet its forecast cash requirements, it may not have sufficient funds to remain in operational existence.

“These circumstances indicate the existence of material uncertainties that may cast significant doubt over the group’s ability to continue as a going concern.”

  • MRW contacted AEA but they declined any further “comment or interpretation”

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