Specialization: Tailored clothing
Established: 1961
Annual Production: Around 3M units
A global innovative tailoring provider, Bagir Group specializes in developing, manufacturing and marketing of high quality men and women’s tailored fashions. Bagir Group leverages their Global Presence, Vertical Structure & Innovation in order to provide consumers with the ultimate wearing experience combining fashion, comfort, performance and value.

At Bagir Group, focus on excellence in design and innovation throughout the entire value chain is a fundamental platform for achieving their goals. Strategic partnerships with retail customers keep Bagir Group in tune with the latest industry needs and trends while helping ensure their customers´ competitiveness and consumer satisfaction.

Bagir Group markets their suits, jackets and trousers under retail private labels as well as world renowned brands such as GIR Collection, AR-RED, Jay Godfrey, and Simon Carter. From fiber to fabric, from design to display, Bagir Group is among the world’s most innovative tailoring providers. The latest innovations introduced by Bagir Group include stylishly designed concepts from flexible and stretchable clothes to machine washable suits and airy all-climate garments. At Bagir Group, innovation means delivering consumers with clothes and suits that offer perfect performance backed by an experience of pure comfort and style.

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Singer note today:
"Bagir, which floated in April, has experienced an unexpected and sudden reduction in orders, and margins on retained sales, from its largest customer and the company highlights uncertainty as to whether previous ordering patterns will be sustained. Revenue and EBITDA is expected to be below plan this year, a major disappointment. Next year we anticipate some growth on the revised FY’14 base, pending clarity from Bagir once changes to operating structure, costs and other initiatives have been concluded. The company has commenced the process of obtaining a waiver from its lenders regarding banking covenants.

Trading Statement – Bagir has issued a trading statement today indicating that it has experienced an unexpected reduction in the volume of purchase orders, and a reduction in margins on retained revenue, from its largest customer, predominantly in relation to the Q4 period ahead. The company has indicated that there can be no certainty that the customer’s previous order patterns with them will be sustained, which we believe is suggestive of an internal change of buying/sourcing strategy.

Internal Responses Being Implemented – In light of this, management intends to adjust its operating structure and achieve material cost reductions, some of which will be seen in part in the current financial year. Furthermore, management is pursuing additional business with existing customers while continuing to source new business. This may compensate for part of the loss of revenue albeit the outcome of these actions is not certain at this stage.

Outlook Downgraded – Following the reductions in purchase orders the company now expects revenue to be in the range $100-104m for the current year to Dec’14, equivalent to a shortfall of c$15m compared to previous plans. EBITDA is expected to be in the range $4-6m and we assume pre-exceptional PBT in the range break-even to a $2m loss. We anticipate no DPS being proposed this year as a result of the downgrade. Y/E net debt is expected to worsen broadly in line with the reduced EBITDA expectation, to approximately $19m."

Directors Dealings

Bagir Group Ltd. ("Bagir" or the "Company"), a designer, creator and provider of innovative formalwear tailoring, has been notified that Samuel Vlodinger, a Non-Executive Director of the Company, has today purchased 133,333 ordinary shares of NIS 0.04 each in the Company ("Ordinary Shares") at 22.5 pence per share.

Following this purchase, Samuel Vlodinger is directly interested in 133,333 Ordinary Shares representing 0.27 per cent of the total voting rights of the Company. In addition, Samuel Vlodinger is interested in 128,175 options over Ordinary Shares.

Samuel Vlodinger is a senior partner at First Israel Mezzanine Investors Ltd. ("FIMI") which, through FIMI Israel Opportunity Fund II, L.P., FIMI Opportunity Fund II, L.P. and FIMI Opportunity 2005 Ltd., is interested in 8,735,385 Ordinary Shares, in aggregate, representing 17.39 per cent of the total voting rights of the Company.

Samuel Vlodinger is therefore, directly and indirectly interested in 8,868,718 Ordinary Shares, in aggregate, representing 17.66 per cent of the total voting rights of the Company.

In addition, the Company has been notified that S.G. Textile Holdings Ltd. ("SG"), a substantial shareholder in the Company, has today purchased 348,000 Ordinary Shares at 21.5 pence per share.

Following this purchase, SG is interested in 8,050,110 Ordinary Shares representing 16.03 per cent of the total voting rights of the Company.

Marc Zalcman, a Non-Executive Director of the Company, owns 14 per cent. of the issued share capital of Silverboim Industries Ltd, which in turn owns the entire issued share capital of SG.

Bagir Group Ltd.

(the "Company" or "Bagir")

In its announcement on 15 May 2014, Bagir stated that it had commenced discussions with its banks regarding the Company's banking covenants.

The Company confirms it has now agreed revised banking covenants for 2014.

Trading Update

Bagir Group Ltd. ("Bagir" or "the Company"), a designer, creator and provider of innovative formalwear tailoring, provides the following update on its half year results to 30 June 2014:

Bagir expects its results for the six months to 30 June 2014 will show revenue of approximately $48m, EBITDA of approximately $1.6m and a loss before tax of approximately $2m. EBITDA and loss before tax exclude IPO costs of $0.3m which are to be charged against earnings. Net debt at 30 June 2014 was approximately $9m.

The Company's trading statement on 15 May 2014 reported that it expected revenue for the year ending 31 December 2014 to be approximately $100m to $104m, with EBITDA of approximately $4m to $6m. While in line with the previous estimates, the Company expects the full results to be at the lower end of these ranges.

It is anticipated that the half year results will be published on or around 11 September 2014.

How long before de-listing?

The whole debacle is a disgrace.

skinny-

Agreed

I'd forgotten about these.

Interim Results

The results for the first half are in line with expectations. The Board continues to expect revenue for the year to 31 December 2014 to be approximately $100m to $102m and EBITDA to be approximately $4m to $5m* (as announced on 22 July 2014).

Financial highlights
· Revenue of $48.0m
· Gross margin of 18.1%
· Adjusted operating income of $0.3m*
· Adjusted loss before tax of $(2.1)m**
· Adjusted EBITDA of $1.7m*
· Basic and fully diluted loss per share of $(0.10)***
· Net debt at 30 June 2014 of $8.5m
· Cash and cash equivalents at 30 June 2014 of $16.1m

* Adjusted for IPO expenses of $0.3m
** Adjusted for IPO expenses and including finance expenses on pre IPO debt
*** Including finance expenses on pre IPO debt

Operating highlights
· Implemented a cost savings plan and started a comprehensive process of examining operating processes and strategic focus. The review has been designed to reduce operating costs, improve operating profitability and enhance the Company's sales and marketing performance

Investment in a production facility in Ethiopia
· Bagir has signed a conditional agreement to purchase a 50% stake in Nazareth Garments Share Company ("Nazareth"), an Ethiopian company which owns and operates a garment factory in Ethiopia, for a total consideration of $1.5m
· Agreement is subject to several conditions which are to be met by both Nazareth and Bagir
· Closing is anticipated in Q4 2014
· The production facility in Ethiopia is expected to give Bagir a competitive advantage due to the duty free export environment to the EU and US, the competitive costs, and the government support for the textile industry

AIM's most promising turnaround plays

Bagir Group Ltd (BAGR)

10p

Few companies have managed to disappoint as quickly as Bagir (BAGR) so it is no surprise that investors' have a lack of trust in the company. On the 15 April 2014, the designer and supplier of formalwear joined AIM and raised £20 million (£17.6 million after expenses) at 56p a share. Bagir is currently valued at £5.02 million at 10p a share.

That share price slump is because, exactly one month after flotation, management warned that there had been an unexpected reduction in orders with Marks & Spencer (MKS) considering changing its purchasing policy. Marks & Spencer and Arcadia are Bagir's two largest clients. This meant that 2014 revenues are unlikely to be much higher than the 2013 figure of $99.5 million and underlying EBITDA's expected to be between $4 million and $5 million, compared with $6.1 million in 2013, but there will be a pre-tax loss. There have been cost savings and further operating efficiencies are planned in order to return Bagir to profit this year.

There was cash of $16.6 million at the end of June 2014, but also $25 million of total debt. Since then, $1.5 million has been spent on a 50% stake in an Ethiopian production facility. The factory will be upgraded so that higher quality clothing can be produced and that will be completed in the first half of this year.

Last July, Artemis increased its stake to 13.3%. Admittedly, Hargreave Hale has trimmed its stake recently but it still owns nearly 17%. The shares are trading on less than twice 2014 EBITDA. There is a business here it is a question of showing that trading has been stabilised. Most importantly, the management has to get back the trust of investors. That could take a long time so the low rating will not change overnight.