Cellcast confident despite Lexinta Fund delays

Cellcast updated shareholders on the cashing in of an investment in the Lexinta Fund on Monday, having notified authorities that it - along with other investors - had not received payment as agreed.

The AIM-traded company had announced on 25 September that it was redeeming its investment in the Lexinta Fund and bringing the cash back into the business, following the decision of the fund manager of the Lexinta Fund to liquidate the fund’s entire portfolio.

It said the investment in the Lexinta Fund, which is based in Zurich and regulated by the Swiss financial regulator, formed part of the company's treasury management scheme and investment strategy.

The total amount of cash invested by Cellcast directly or through associates into the Lexinta Fund was £0.495m.

In the firm’s interim accounts for the six-month period to 30 June, the carrying value of the assets related to the investment in the Lexinta Fund amounted to £0.75m.

Cellcast said it was previously informed in writing by the Lexinta Fund that it would be receiving those funds last week, however as of Monday morning, payment had not been received.

The company, together with a number of other investors in the Lexinta Fund - which includes a private equity fund - has written to the Swiss financial regulator to notify it that the payments had not been made by the Lexinta Fund in accordance with the previously-agreed timetable.

“At this time, the company has no reason to believe that the amounts due to it from the Lexinta Fund will not be received, however, the company continues to have £0.72m of cash reserves as at 31 October held outside the Lexinta Fund, which the directors consider to be sufficient for the continued running and expansion of the business,” Cellcast’s board said in its statement.

“Further updates on the receipt of amounts due from the Lexinta Fund will be provided in due course.”

The directors of Cellcast also updated the market on current trading, saying that following the introduction of the new supplier agreement earlier in the year as announced on 27 July, it has been trading “profitably” at the operating profit level, based on unaudited management accounts.

In addition, the online segment of the business was said to be performing well.

“The directors are pleased with the trading performance of the company in the second half of the year to date and are optimistic about the prospects for the next financial year,” the board added.