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(Alliance News) - Redcentric PLC on Friday said it has suspended share buybacks and is not likely to declare a final dividend amid Covid-19 uncertainty.
In addition, the IT company, which specialises in remote access software and telephony, said Dean Barber will step down as chief financial officer, effective immediately, and David Senior will join the board of director and take over as CFO with immediate effect.
Senior has been with Redcentric in the role of finance director since 2017. He is a chartered certified accountant with 20 years of experience in finance, including in several senior positions with Wolseley PLC.
"I am pleased to welcome David to the board. David's experience and skills have already been, and will continue to be, of great benefit to the company and we look forward to having him on the board. I would also like, on behalf of the board, to wish Dean well for the future." said Chair Ian Johnson.
The IT managed services provider said its trading performance for the financial year ended March 31 is expected to be in line with its expectations.
In the second half of March, Redcentric said it has seen a material increase in sales opportunities as a result of the Covid-19 pandemic. Demand has been particularly strong for increased bandwidth and, in particular, for the company's secure remote access product.
The volume of new recurring revenue contracts signed in March was materially above that seen in previous years, Redcentric highlighted.
The company said it expects April new sales volumes to be as anticipated for this time of the year.
Looking further forward, Recentric anticipates a reduction in sales to new customers and a slowdown in major change projects from existing customers until such time as the Covid-19 crisis is averted.
Offsetting this, Redcentric expects a lower level of normalised cancellations and renewal churn in the same period.
Net debt as at the end of March was GBP13.5 million, including GBP400,000 of share buy backs in the second half.
However, Redcentric said it has taken the decision to temporarily halt its share buyback programme until such time as the outlook becomes more certain.
Also, the company said it is highly unlikely that a final dividend for the year will be recommended.
The company expects to report its full-year results on June 25, it said.
Turning to Covid-19, Redcentric said the duration and extent of the economic consequences of the pandemic are currently unknown, and this makes predicting future demand for the company's offerings difficult.
Redcentric shares were trading 5.1% higher in London on Friday at 103.56 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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