Scapa Group plc (lon:scpa)
Scapa Group – Oversold On Contract Loss?


ItemCurrent PeriodPrevious Period
Adjusted Earnings
Adjusted EBITDA
Statutory Profit£8m£24m
Adjusted Profit£38m£34m
Total Debt
Net Debt£56m£4m
Title: Scapa Group – Oversold On Contract Loss?
Company: SCPA - Scapa Group plc
Share Price Then: 0p
Author: Ian Smith
Date: Thu 13 Jun 2019
Comments: Recently ConvaTec announced that it was terminating its agreement with Scapa Tapes North America, this cancellation is contested by
Scapa as they believe that they have a binding commitment for a minimum of USD30 million per year.

Clearly this is heading for an expensive court case, so what at the effects on Scapa?

The estimated loss of revenue has been reported as could be c£28.0m in revenue and c.£13.0m trading profit in FY20.

The loss of revenue represents a bit less than 10%, but a loss of almost a third of the trading profit.

This brings the company back to 2016/2017 numbers and at that time the share price was between 200p and 300p.

Net debt has rocketed because of the acquisition of the Systagenix manufacturing facility for £34.0m in cash and the big change in profitability is mostly due to £12m exceptional charge for closing some sites.
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