Ceva Logistics has postponed its proposed float on the New York Stock Exchange (NYSE) as it looks to restructure its balance sheet and stem its shrinking profits.
In May 2011, Ceva, which is owned by affiliates of Apollo Global Management, revealed its intentions to file for an initial public offering (IPO) on the NYSE. However, yesterday it reported a 22% fall in annual pre-tax profit which its chief executive Marvin Schlanger labelled “not good enough”.
Speaking to MotorTransport.co.uk, Rubin McDougal, chief financial officer at Ceva, said of its simultaneously announced plans to restructure its debt, reducing it by €1.2bn, and raised €205m of capital for investment: “It was a necessary step before we could do any IPO.
“We have to get the leverage down given the soft performance of the industry. We did not get the leverage down in a timescale I was comfortable with,” he added.
It is currently in the process of trimming €100m of cost out of its global business, a process he describes as 90% complete and expected to be completed in the third quarter of this year, and it is renegotiating poor performing contracts. However, these cost reductions have applied primarily out of its business in the UK.
“The UK is seeing less impact and cost-cutting because it actually is doing very well. We are doing very good business there,” he said, singling out the performance of its contracts in the UK automotive manufacturing sector.
However, he warned that the UK overall had “been soft and more so in the last six months”, particularly when it came to retail.
