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AEA Technology jumps on interim report, amends 2012 banking covenants


AEA Technology (LON:AAT) saw its share price add more than 30 percent this morning as investors cheered the group's interim report, which showed a significant reduction in losses compared to 2010.

Importantly, the energy and environmental consultancy said its sole lender Lloyds (LON:LLOY) has agreed to amend its financial covenants for 2012 and grant AEA continued access to the banking facility “for the foreseeable future”.

AEA added that it expects to successfully renegotiate banking covenants for 2013 during 2012.

Earlier this month, the group saw more than 80 percent of its value wiped out as it issued a profit warning and announced it was in discussions with Lloyds relating to its banking facilities.

In the profit warning, AEA said its operating profit performance for the full year would be for the full financial year would be significantly below expectations, leading to the resignation of its chief executive Andrew McCree.

Today, the company announced the appointment of John Lowry as its interim CEO.

Running through the firm’s financial results, revenues in the six months to end September climbed five percent to £53.3 million as orders increased 84 percent to £73 million, resulting in a decline in pre-tax losses from £8.8 million a year earlier to £2.1 million.

AEA’s debts stood at £34.3 million at the end of September, up from £28.3 million at the end of March this year.

The group said its performance in the second half of the year will; be impacted by a reduced forecast revenue and adjusted operating profits at its Washington based operation PPC.

Meanwhile, performance at its Boston based busi9ness ERG and its operations in Europe remains in line with the management’s expectations.

Investors cheered the report, sending shares in AEA up 32 percent to trade at 0.66 pence, valuing the group at £9.6 million. Shares in AEA traded at nearly two pence before the profit warning was released on November 16.

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