Walker Crips secures £5m lifeline after swinging to full-year loss

(Sharecast News) - Investments, financial planning and pensions group Walker Crips has decided not to issue a dividend to shareholders after swinging to a big loss in the year to 31 March, as it announced a new £5m working capital loan. In a statement to the market late on Thursday, the company said that, due to "a number of historic challenges", the company had to fund substantial investments in legal and consulting services, as well as the recruitment of additional compliance personnel.

Meanwhile, attracting and retaining essential risk and compliance staff meant "considerable" salary increases were necessary.

As a result, Walker Crips reported a loss before tax of £3.28m for the year, compared with a profit of £0.39m the year before, with revenues falling 0.7% to £31.35m.

Chair Jo Welman, who joined the company on the first day of the new financial year, is now spearheading a "comprehensive review" of the business, including its operating structure, risk management processes, client servicing capabilities, and business culture.

"This will encompass an assessment of our strategic options to strengthen the balance sheet, as well as a wider review of our group's culture, with a focus on fostering greater alignment around shared objectives and enhancing our collective responsibility for both individual and company-wide performance," Welman said.

Separately, the firm announced a new £5m working capital loan drawdown facility from 29% stakeholder, PhillipCapital, providing it with necessary funding to "support its future plans and reinforce the company's financial stability". The facility has a fixed term of two years at an interest rate of 9.07% per annum.

"The availability of this loan is instrumental, without it, the group would lack the capacity to implement essential changes and invest in the growth strategies required to move our business forward," Welman said.