(BFM Bourse) – The kitchen utensil specialist announces that it is requesting placement in a safeguard procedure, due to a lack of new orders from Whirlpool, its main customer.
The situation is clearly becoming more complicated for Mastrad. The kitchen utensils specialist announced Tuesday evening after the close of the markets that it had been placed in safeguard procedure, as a result of the cessation of orders from Whirlpool, its main customer.
Mastrad explains that it finalized two very large deliveries of connected thermometers for Whirlpool in August and September, but that since then the American household appliance giant has not issued any new orders. Worse still, no communication on forecasts for 2024 has been sent by the American. A huge blow for the French company since last year, Whirlpool accounted for more than 70% of Mastrad’s turnover in the connected thermometers segment.
The visibility over the year 2024 of orders for connected thermometers turns out to be “therefore greatly reduced”, admits Mastrad. The group’s cash flow is degraded. And therefore the company is no longer able to pay future installments.
A race against time
The company considers that given its current cash flow situation, it is able “to continue its commitment to the development of its products and commercial initiatives”. But to preserve its financial cushion, Mastrad explains that it has made a request for the establishment of a safeguard procedure with the Paris Commercial Court.
For a company in difficulty, the safeguard procedure is likely to increase its chances of reaching a debt restructuring plan with its creditors.
France implemented this procedure in 2006, which is an alternative to judicial recovery. The principle is (almost) the same since it involves avoiding the liquidation of a company with payment difficulties.
In the case of Mastrad, the opening of the safeguard procedure will allow the company to facilitate the search for new partners, as well as protect the current cash flow, “thus ensuring the security of investments planned for the months to come”.
A race against time therefore begins for Mastrad, who nevertheless says he is “resolutely optimistic about his future”.
“The company perceives the request for a safeguard procedure if it is successful as a strategic step aimed at ensuring a stable transition to a new phase of growth and prosperity for the company and its shareholders,” explains Mastrad in its press release.
A refocus on more profitable products
In great financial difficulty, with activity undermined by logistical concerns and the crisis in household purchasing power, Mastrad had to make radical decisions. At the end of January, the company appealed to the market to ensure its survival and extend its financial horizon to more than a year. Without this operation, this same financial horizon would then have ended in the following month, that of February. In other words, tomorrow for the company which had a pressing need to replenish its cash flow in the short term.
And thus manage its refocusing as best as possible, even if it means making radical decisions, the most emblematic of which is that of no longer operating its own traditional – that is to say non-electronic – products business. Either mussels, spatulas or other spoons…
From now on, Mastrad only sells temperature control and measurement utensils, as well as smart and connected accessories. And in the accounts recently published at the end of October, this refocusing on these growing and more profitable activities was clearly starting to pay off. Between January and June, which corresponds to the second half of the year for Mastrad, the group saw its sales jump by 18% compared to the first half, to stand at 3.4 million euros. Another significant point, the group’s net loss was contained at 0.32 million euros over the period.
Confident in this refocusing, Mastrad also explained that it was expanding its range of wireless temperature probes with the launch of new products in early 2024, in order to complete its range of connected thermometers. But abandoned by its main client, Mastrad must now ensure its survival. The decision of the Paris Commercial Court on its placement in safeguard procedure is expected on Monday January 8, adds the company in difficulty.
Pending developments in this procedure, the company’s stock is therefore suspended on the Paris Stock Exchange at a final price of 0.02 euros. Founded in 1994, Mastrad made itself known with the invention of the anti-odor steel soap Deos, recalls Le Monde on the occasion of the IPO of this company in May 2006 on Alternext (the former name of Euronext Growth, Editor’s note) at a price set at 7.13 euros.
Sabrina Sadgui – ©2023 BFM Bourse
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