Manufacturer Ebac is in talks with investors and finance firms to aid work on its latest project, despite noting “significant issues” with a decline in trade, accounts show.
The Durham business, which makes washing machines, dehumidifiers, water coolers and heat pumps, has filed delayed accounts for 2022 which also outline a “challenging” few years for the business. In 2022 turnover rose from £20.13m to £21.86m and operating losses narrowed from £3.07m to £2.7m, with the overall loss for the year coming in at £3.19m, down from £3.25m.
During that financial year the workforce grew from 236 to 254 but, since then, the firm’s chairman and founder John Elliott says it has reduced its headcount to 160 as part of efforts to reduce its cost base – moves which have boosted its performance. The restructuring saw half of the reduction come through staff retirement and people leaving the company, and it has recently started recruiting into its design team.
Read more:
Go here for more North East business news
Ebac has been heavily involved in new product launches designed to help tackle the climate change agenda – including domestic heat pumps suitable for the average 海角视频 home – and last October it secured a £4m refinance deal with Cynergy Business Finance to aid the products’ development. Directors believe the new heat pump represents a “significant opportunity” for the group going forward.
Now accounts filed this week reveal that Ebac is in more talks with financial organisations, saying the group is “well advanced in discussions with other third parties regarding potential equity investment, securing additional debt finance and is also exploring options regarding further connected party loans”.
In the accounts, Mr Elliot says: “The group has experienced significant issues with a decline in trade and pressure on cash flows which resulted in the group breaching covenants attached to some of its debt facilities. As a result the group has actively sought to refinance. In addition to the refinancing the group has addressed its cost base via a combination of a reduction in head count and also undertaking a significant efficiency drive which has resulted in a significant improvement in trading performance which the directors are forecasting will continue going forward.
Most Read
“The group is currently in discussion with a number of parties regarding potential additional finance to aid the development and production of the heat pump line and believe that this opportunity will generate significant funds for the group in future years. Whilst discussions have not been finalised, at the date of writing, the directors are confident that there will be a successful outcome and that this will provide a significant growth opportunity for the group.”
In his report, Mr Elliott describes a challenging time for Ebac, adding: “The past couple of years since Covid, have been a struggle for the company, the industry, the country, and the world but with adversity comes opportunity. These difficult times have allowed us to focus on our cost base, improve efficiencies and invest in new products.
“Our investment in new products is now starting to pay off, leading to opportunities in new markets. Ebac remains a flexible, innovative and determined group of companies that continues to create products that can be made in North East of England, providing employment and economic activity in the important manufacturing sector. I am confident that the difficulties of recent years can now be put behind us as we manufacture and sell some brilliant products that will continue to secure our future in the years to come.”
Following publication of the accounts, Mr Elliott said: “These accounts demonstrate that the business is making good progress following a globally challenging time. This has continued into 2023 and 2024 and following investment in bringing new products to the market, our heat pumps and home dehumidifier and ventilation system are attracting considerable interest.”