(Alliance News) - RPS Group PLC on Tuesday said it expects Covid-19 to hurt its business as it announced a series of cost-cutting measures.
The professional services firm said that although the outbreak did not hurt financial performance in the first two months of the year, it is "inevitable that Covid-19 will adversely affect" its business.
The company said that it has embarked on a number of cost-cutting measures which includes cancelling the payout of its proposed final dividend of 2.00 pence resulting in savings of GBP4.5 million. It will also save around GBP5 million through the suspension of all planned work on its ERP system. Additionally, it has deferred all 2020 salary increases and 2019 senior leadership bonus payments, as well as stopped all non-essential expenditure.
As at the end of February, RPS had committed bank facilities headroom of GBP33.0 million. Net debt as at February 28 stood at GBP109.7 million.
"Given that significant uncertainty exists around the impact of Covid-19, we have decided to take immediate and significant measures to contain our costs and protect our financial position. We are adept at managing volatility, have good operating cash flows, a healthy mix of private and public sector clients and a strong, experienced senior management team. The board is confident in RPS' ability to weather this unprecedented challenge and remains confident in our longer term strategy," said Chief Executive John Douglas.
Shares in RPS were trading 13% lower at 41.25 pence each on Tuesday morning in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
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