MTS updates on trading and suspension

Management Resource Solutions says in light of the potential delay in the publication of the audited accounts, no application will be made for the suspension of the company's ordinary shares from trading on AIM to be lifted until the board has more clarity on the likely completion of the accounts.

The company says the directors have become aware that certain of the funds raised by way of a placing of new shares in August to finance the acquisition of SubZero (now MRS Services Group) were not applied to MRS Services Group's working capital as anticipated.

This combined with non-receipt of amounts due to the company in relation to the consulting contracts means the group will face a cash constrained period over the next two months. To address this situation, the company has been in discussion with its banks, who have expressed their continuing support for the remaining business, and has secured an invoice finance facility from Hermes Capital Australia Pty Ltd which, combined with the annualised savings of A$2.5 million already announced and undrawn existing facilities of approximately A$700,000, provides adequate headroom for operations for the foreseeable future.

The Hermes facility is for up to A$6 million at an advance rate of 80% of applicable invoices.

The facility will remain in place for a minimum term of 12 months and is secured over certain assets of the group.

An update says: "Regrettably access to the management accounts of MRS Pty Ltd, through which the Group formerly operated its consulting business and head office, was disrupted by a former member of staff and has only recently been re-established. As a result, the auditing process of the results to 30 June 2016 has been delayed.

"Whilst every effort is being made to complete the audit prior to 31 December 2016 as required under the AIM Rules, there can be no certainty that this will be achieved and a further announcement will be made in respect of the accounts in due course."