Factoring solution saves Hill Station

25/06/2008

Troubled ice cream maker Hill Station has secured a £3 million invoice discounting facility with Cattles Invoice Finance.

The factoring solution is badly needed: the AIM-listed firm's shares have plummeted to 0.17p, compared with 10p in 2004. News broke in April that bankers intended to put a £1.1 million cap on the factoring facility. This had a detrimental effect on sales in both April and May because the firm was obliged to scale back the usual inventory build.

However, the good news about the £3.3 million factoring facility has meant Hill Station has been able to close new business deals with substantial customers, in the wholesale and retail sectors.

The firm has announced that first half earnings are in line with forecasts. The factory is reported to be producing record volumes of stock.

Hill Station released a statement to say: "The outcome for the six months to 30 April 2008 is encouraging with EBIT being in line with management expectations notwithstanding the difficulties caused by the cash constraints arising from the bank's decision to cap the factoring facility."

In addition to the factoring facility, Hill Station has agreed an extra £500k of loan stock with shareholders.