Cash flow remains tight and despite a number of expressions of interest the company has not yet been able to finalise an agreement to strengthen our balance sheet, its chairman Malcolm Jackman told the company’s annual general meeting.
“Like all companies supporting the mining and resource sector, SubZero has not been immune from the significant downturn in the sector and accordingly the underlying results have proven to be very unsatisfactory and well below expectations,” he said.
“Whilst production levels in the Hunter Valley have remained high, mine operators have been managing both expenditure and cash very keenly.
“I am pleased to report that since 30 June 2015 the company’s performance has improved despite market conditions remaining soft.”
Throughout the year SubZero has endeavoured to consolidate its financial position, Jackman said.
“To this end we believe we have secured an ongoing pipeline of work to support its core businesses as a provider of support services to the mining and resource sector,” he said.
“This is best evidenced by the fact that our main facilities are currently close to full capacity.
In late August last year it became evident that we could no longer rely on the orders that we were expecting and your board took steps necessary to implement significant cost savings.
These savings, together with the improved revenue and the dedication of our employees, has seen our operating margins improve significantly.
“This process is continuing with further cost saving initiatives identified to deliver a further $4 million of annualised savings.”
SubZero is working with stakeholders and parties who have an interest in recapitalising the company to provide the necessary working capital to properly fund the company’s ongoing activities. Until this has been achieved, the company’s shares will remain suspended from trading on the ASX.
“Fortunately our financers have continued to support our turnaround strategy by deferring interest payments and providing an extra $2.5 million in facilities,” Jackman said.
“With ongoing support the company aims to preserve its ability to offer clients the services they need to meet their long term operational and maintenance requirements given we have both the facilities and the expertise to support the industry.”
