Challenger Acquisitions Limited (LON:CHAL) has refocused its efforts on observation wheel projects in both Texas and New York as the company announced it had streamlined its corporate profile in full-year results.
The leisure and entertainment investment company said most of the main components for its New York Wheel Project were now complete, with the components for the four 275-foot legs being stored in Brooklyn ready to be assembled on site.
The group added that the operators of the New York project, New York Wheel Investors LLC, were in advanced discussions to hire American Bridge Company, an experienced engineering and construction firm, as contractor for the project.
This followed the termination of a contract with the original wheel erectors in mid-2017 due to a contractual dispute, with Challenger saying it expected construction on the wheel to recommence in the short-term.
Meanwhile, the group said a seven-acre parcel of land had been secured for the Eye of Texas observation wheel project in Dallas, with activity and development set to increase.
Challenger has already invested US$300,000 in the project, with an option to invest up to US$1mln and to become an operator of the wheel once it has been constructed.
The firm also said it had successfully disposed of its ownership interest in Starneth Europe BV and Starneth Holding BV, following an unsuccessful attempt to secure a contract to construct another observation wheel in Jakarta.
Challenger said the disposal removed a significant cash drain while also maintaining the potential to receive up to US$6mln in fees less a payment of €1.25mln upon the closing of at least two major development projects by Starneth until January 2019.
The company added that with the disposal of Starneth, its heavy cash burn had come to an end and that changes to the structure of the board, including the departure of three directors over the year, had allowed it to achieve significant cash savings and to be able to pay all external vendors for work performed in 2016 and 2017.
Challenger also saw its pre-tax losses from continuing operations narrow during the year, down to £999,000 compared to £1.9mln the year before.
The firm also said it had generated £600,000 in cash net of fees from financing activities, with cash used in operations totalling £592,000 for the year.
Mark Gustafson, Challenger chief executive, said: “The year under review has been one of stabilisation for Challenger, as we have looked to re-focus our strategies, identify new opportunities for investment, and ultimately ensure we are positioned for growth.”
Challenger shares were steady at 0.28p in lunchtime trading Monday.
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