Blancco Technology Group reveals pressure on cash, funding needs

It said costs associated with past acquisitions, the later arrival of a large government contract and the slipping of larger contract deals to later this quarter would build pressure on the forecasted cash available to the Company during Q4.

Blancco had also revised its projection for group net debt to about £5.5m at June year end, and required additional funding of a minimum of £4m over the coming weeks to "address the working capital position and increase the company's headroom."

It said directors were exploring a range of possible sources for this additional funding and were initiating talks with its bankers and shareholders concerning the most appropriate way to fill the funding shortfall.

"The company is confident of a satisfactory outcome and will update the market further when appropriate," it said in a statement.

Blancco added that third-quarter trading was strong with group sales up 48% year-on-year on a constant currency basis, comprising 36% growth in erasure and 189% pro forma growth in diagnostics.

In the first nine months of the year, group sales firmed 34% year-on-year in constant currencies, with erasure growth now at 26% and pro forma diagnostics growth at 137%.

"The outlook for full year 2017 sales and adjusted operating profit remains in line with market expectations."

At 10:45 BST, shares in AIM-quoted Blancco were down 21.99% to 168.5p each, and off earlier lows.