Bagir Group Ltd Update on status with Shandong Ruyi and 19 Trading
RNS Number : 6769D
Bagir Group Ltd
21 February 2020
20 February 2020
Bagir Group Ltd.
("Bagir", the "Group" or the "Company")
Update on status with Shandong Ruyi and 2019 Trading
Bagir (AIM: BAGR), a designer, creator and provider of
innovative tailoring, confirms that it has resolved to take legal
action against the Shandong Ruyi Group for breach of contract.
On 19 June 2019, the Company announced, with regard to Shandong
Ruyi's remaining cash payment of $13.2m, that the Company had
agreed to a further extension of the unconditional* completion date
to 31 March 2020. The transaction was first announced on 23
The extension of the unconditional* completion date to 31 March
2020 was conditional on Shandong Ruyi providing suit jacket
manufacturing equipment, with an estimated market value of
approximately $1.3 million, for nil consideration, for use in
Bagir's Ethiopian manufacturing facility, by the end of September
The manufacturing equipment has not, however, been delivered, to
date. This further failure by Shandong Ruyi constitutes a material
breach of the terms of the contract.
*All other conditions relating to the proposed investment having
Whilst trading conditions have remained challenging, the Company
continued to generate good sales growth for the 12 months to 31
December 2019, up 9 % to $ 59 .4 m (2018: $54.6m) and expects to
deliver a return to positive adjusted EBITDA** (2018: negative
adjusted EBITDA** $1.0m). This improvement in adjusted EBITDA** has
been assisted by a further reduction of operational costs completed
during H2 2019.
Looking ahead, the Company is finalising a plan to establish a
new production line in Ethiopia to manufacture suit jackets which
requires an additional investment of approximately $0.5m. The new
line will be capable of producing 250 suit jackets per day.
The trial order for a large UK retail client will be completed
and delivered during March 2020 with a $0.85m suit order for 2020
already secured from this customer. In addition, based upon the new
business pipeline there are good prospects for winning further
orders from new customers during the current year.
As a result, the Board believes the Company has resources to
support its current day-to-day activities and will continue to act
in order to secure future growth through commercial contracts with
customers and additional funding to support the Group's plans.
Micha Ronen, CEO of Bagir said "It is disappointing to announce
our decision to have to take legal action against the Shandong Ruyi
Group but we have been left with no alternative. This will,
however, mean our operational focus can now be solely focused on
Bagir and making innovative, modern, design-led tailored garments
for the world's leading retailers."
**The Adjusted EBITDA is a non-IFRS measure that the Company
uses to measure its performance. It is defined as Earnings Before
Interest, Taxation, Depreciation and Amortisation, non-cash
share-based compensation and excluding other expenses/income.
For further information, please contact:
Bagir Group Ltd. via Novella on:
Tessa Laws, Non-Executive Chair +44 (0) 20 3151 7008
Micha Ronen, Chief Executive Officer
Dotan Levy, Chief Financial Officer
James Moat +44 (0) 20 7496 3000
Fergus Young +44 (0) 20 3151 7008
For more information about Bagir, please visit the Company's
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