Magir: New structure to reassure lenders
Magir is the group company that trades through a large number of Medicare Pharmacies around Northern Ireland. It is the larger of two Northern Ireland owned groups of high street pharmacies, trading alongside the major national groups.
The company has been trading with a positive operating profit in recent years. Significant borrowing costs of over £3.6m each year have meant the company has recorded pre-tax losses. Borrowed funds in August 2012 amounted to over £58m. This was nearly £4m lower than a year earlier.
In November 2013 the company agreed a refinancing deal with certain lenders. A new term facility for £37m was advanced by a new bank syndicate. A remaining loan balance in late 2013 of £7.84m was waived by the former lender. One of the existing shareholders provided a sub-ordinated loan of a further £2m.
The company is controlled by Mr M Guerin who controls 74% of the issued share capital. However, a range of subsidiaries of United Drug plc are all related parties to this company and provided purchases by Magir valued at over £24m.
The directors' report offers a statement of reassurance on the ability to report on a going concern basis. The confirmation of continued funding being available from the group bankers to assist with discharging liabilities when they fall due has allowed the directors to maintain a going concern basis.
The capital restructuring, when reflected in the accounts for the year to August 2014, will reflect a stronger pre-tax position and a better balance sheet value of shareholders' funds.
Employment in the company averaged 491 people in the recent reported year to August 2012. Consistent with the fall in turnover in the last two years and the fall in operating profits, employment had fallen by 16% from an average of 586 the previous year.