Company news: Cardno
Not unexpectedly, Cardno announced a rights issue - it was flagged on 2-May-16. The proceeds will be used to reduce debt - we now expect the company to be debt free by the end of FY-17. It will also preserve the excellent banking package currently in place (for future use) whilst they restructure the business and look to exit 1H17 strongly.
Cardno has in recent times been a small part of our portfolios. We will use this raise to build our position once again, and at a very favourable price.
It is important to understand that underneath the US restructuring / turnaround and the debt reduction, there is stable, cashflow positive business. We expect that this will become apparent as we go through FY-17, and we look forward to seeing a good return on our Cardno investment in due course.