Wynyard Group goes into administration

KordaMentha partners, Neale Jackson and Grant Graham, have been appointed as administrators

Struggling NZX-listed cyber security company, Wynyard (NZX: WYN) has gone into voluntary administration after abandoning plans to take on a new $10m loan, or raise new capital. KordaMentha partners, Neale Jackson and Grant Graham, have been appointed as administrators.

In a statement to the NZX the company said its board had considered all available options including potentially raising additional capital and drawing on the $10m loan but had concluded neither option would be in the best interests of the company, its shareholders or other stakeholders.

“The board believes this is the right decision under the circumstances, in order to ensure an environment where all options can be fully explored to retain the value in the business,” the statement said. It promised to work with KordaMentha to support shareholders, staff and customers and to move quickly through this process.

Wynyard announced in August that it had secured a short term $10 million revolving credit facility from major shareholder, the UK’s Skipton Building Society, saying: “This credit facility, should it be required, will help Wynyard manage the working capital needs of the business over the next 12 months.”

That funding comes with a number of strings attached. In order to access the funding the Wynyard board had to be confident the company would be able to enter into transactions sufficient to repay any amount drawn down under the facility. Proceeds of transactions had to be applied to repayment of any outstanding amounts under the facility

In August Wynyard reported a pre-tax loss of $37.6m for the six months to 30 June 2016, double its loss for the same period in 2015. Revenue was $12.9m, only marginally up on the $12.4m for the same period last year.

It forecast revenue for the year to 31 December 2016 would be in the range $27m-$30m, less than half the earlier guidance of $54m-$65m. The company explained the difference saying it was “excluding large government deals ranging between $3m-$20m” adding: “None of the large deals in our pipeline have been lost - we’re making good progress but wish to be cautious in setting market expectations.”

Despite these results chairman Guy Haddleton appeared relatively positive, saying the company had focussed its limited resources on building its US public sector business, Middle East homeland security business and on proving its securities analytics opportunity. “This relentless focus has yielded significant cash savings of $17m annualised and I believe the company is now in much better shape to deliver on its opportunities,” he said.

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