The Aim-listed PLC has pivoted to become focused on software services in vertical markets.

It sold its Works Manchester production hub 15 months ago, but the situation regarding PFI Group’s failure to meet the agreed payment schedule still remains unresolved at the time of writing.

Grafenia has had to make an £805,000 write-down as a result.

Regarding the sale of Works Manchester, Grafenia stated: “What that meant was our Nettl Systems business became a software operation, with a significantly reduced cost base.

“But as a group, we became smaller as a result of the divestment, with the same central costs. Growing the size of the group, faster, became the priority.”

Today, (29 August), Grafenia announced that it now planned to raise £23m via a placing and subscription offer at 8.5p per share; plus approximately £4.9m via an open offer to qualifying shareholders.

The issue price represents a discount of 17.1% to the group’s closing mid-market price of 10.25p per ordinary share on 25 August.

Grafenia plans to use the fresh funds to pay £3.4m deferred consideration on previous buys, repurchase some of its existing bond arrangements, and for future acquisitions.

It posted sales up 1.5% at £12.55m and EBITDA from continuing operations of £410,000 (2022: £170,000) in the year to 31 March. The bottom line loss was £1.61m, including the £800k related to the Works Manchester situation.

The group said its current run rate for annual turnover was £17m.