Densitron - still no good reason to re-invest

Densitron, a company that I have commented on in the past, released a statement this week concerning the settlement of a claim made against the Company by the landlords of a property in Newcastle previously occupied by a former subsidiary, Densitron Ferrograph Limited.

In the past I have held shares in Densitron, but decided to sell when this case appeared to be dragging on and trading had deteriorated. Below you can see my comments back in August:-

 http://michae1mouse.blogspot.co.uk/2013/08/updates-ubc-media-densitron-ddd-group.html

"Densitron was a company in which I held shares, but I did sell in June following a poor trading statement. You can follow my reasoning in the blog below:-

http://michae1mouse.blogspot.co.uk/2013_06_01_archive.html

Following Friday's interim statement, I have no appetite to repurchase any shares in this company.

Revenues decreased by 6% whilst orders booked fell by 7% and the company reported a £315,000 loss.

Whilst the company sounds positive about the second half, has a reasonable balance sheet and is paying an interim dividend of 0.1p, I am nervous about the outstanding writ against the company. This matter has been dragging on for many months despite their attempts to resolve the matter out of court. A date has now been set for the trial on 8th December. This suggests to me that the Landlord has a very strong case, and any settlement either inside or outside of court could (imo) be very punitive for Densitron.

I'll continue to monitor the situation, and never say never, as the saying goes, but allied to recent inconsistent trading this one will remain on the monitor."

Whilst the management state that "the settlement is in the best interests of the group", no financial details have been disclosed and it appears that Densitron are still lumbered with the lease payments until an agent can find a suitable tenant.

I am guessing that the settlement is a hefty one, and then of course they will have incurred legal fees and are still liable for the rent of an unoccupied property.

In response to the news, the share price did move up a few percentage points surprisingly, but whilst Densitron's market cap. is very low, I can't see anything to get excited about and it will be interesting to see their balance sheet when they release their finals.

I really find it most odd that they state:-

"It was agreed that the details of the settlement would remain confidential but in essence the Company has agreed to a settlement amount and the rectification of the lease at the current market rent. "

Are they hoping to keep it secret forever? Will they just ignore it in their final results?

Perhaps they've forgotten that their shareholders are part owners of the company. Bizarre.

Personally, I wouldn't touch this company with a bargepole in the future following this fiasco.