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(Alliance News) - The following is a round-up of updates by London-listed companies on the impact of the Covid-19 pandemic, issued on Tuesday and not separately reported by Alliance News:
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Michelmersh Brick Holdings PLC - brick maker - Will start recommencing production across its plants following suspension of operations on March 30. Michelmersh undertook "an extensive health and safety review" during the suspension and said it "has realigned its operations to meet and exceed government guidelines" going forward.
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Titon Holdings PLC - ventilation systems, and window and door hardware manufacturer and supplier - Will re-start limited scale production at its Haverhill factory in Suffolk with immediate effect. Says it has conducted "careful and detailed planning" and implemented measures so as to meet UK government guidelines on social distancing in the workplace. Production will at first be primarily used "to satisfy existing orders from certain customers, who have maintained operations during the various lockdown regimes imposed across the world." Orders fulfilled are expected to represent just a small fraction of its normal sales level, but increased production and a return to "normalised levels" are expected once demand returns. Titon expects to post its half-year report for the six months ended March 31 on May 14.
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Severfield PLC - structural steel maker - Factories and sites are still in operation "where it is safe and practical to do so". Experiencing some disruption to its sites and within its factories. UK and Europe order book on April 1 was GBP293 million, down from GBP323 million at the start of November. The financial year ended March 31 is not expected to have been materially hurt by Covid-19. Its financial year-end net funds came to GBP16 million, having been GBP25 million the year before. Profitability for its 2021 financial year is likely to be hurt by the pandemic, although most of its construction sites and factories are open and operating. The firm has a GBP25 million loan maturing October 2021 and has drawn down all available amounts under the facility in order to provide control over cash resources. Cash headroom is now in excess of GBP50 million. Operations of Indian joint venture, which performed well in the second half of its financial year, "are expected to be disrupted over a period of several months" given the nationwide lockdown. Will post its annual results on June 17.
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Nexus Infrastructure PLC - infrastructure services, utilities connections and smart energy infrastructure - Closed down site-based activities with 87% of its workforce furloughed under the UK government's job retention scheme. Nexus is managing its business to protect profitability and cash flow and has cut all capital expenditure deemed non-essential, as well as discretionary spending, and has frozen recruitment. The company's board and executive directors have agreed to salary reductions, including a 100% reduction for its chief executive. In the six months ended March 31, Nexus's revenue totalled GBP84.2 million, up more than 18% from GBP71.0 million the year before an in line with board expectations. March trading was disrupted by the pandemic, with cash collection and profitable working both hit. Its March 31 order book totalled GBP300 million, down from GBP311 million the year prior. "The timing of the lockdown is unfortunate as it occurs during a typically strong quarter for the business," says Nexus. At the end of March, gross cash was GBP19.6 million versus GBP17.8 million a year before, while net cash was lower at GBP8.6 million from GBP12.4 million. Accurate market guidance is still not available.
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Pantheon Resources PLC - oil and gas exploration - In response to a negative sector outlook, has opted to review its entire business and to shrink its non-essential costs. This has included a 20% salary reduction across the company. Still seeking a partner for its projects on the Alaskan North Slow, where it holds working interests of between 89% and 100% on a number of projects and has invested more than USD200 million so far. Such a partner would "pay a meaningful up-front cash component as well as carried terms on future drilling".
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Aptitude Software Group PLC - digital finance solutions - Says "financially robust" with cash balance at GBP31.3 million on March 31 and no bank loans. Currently profitable and is generating cash, with an adjusted 2019 operating profit of GBP10.5 million. The firm has "recurring revenue business model" with licence and subscription fees accounting for more than half its total revenue. These, Aptitude explains, have "minimum contractual terms of up to six years at inception" and mean it has good services revenue visibility several months ahead. It also has "only minimal exposure" to those industries most immediately hurt by Covid-19 such as travel, leisure, and retail. In first quarter of 2020, Aptitude's financial performance was unharmed by Covid-19 and revenue and profit was slightly ahead of board expectations. As at March 31, annual recurring revenue had risen to GBP30.3 million from GBP28.6 million at the end of December. Expects sales cycles to lengthen and a few clients are slowing work on projects. Aptitude has deferred all 2020 pay rises, frozen non-essential recruitment, and delayed some initiatives. It its still recommending a final 2019 dividend of 3.6 pence per share.
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Restore PLC - document management and business relocation - Covid-19 has resulted in disrupted business activity levels in its customers and therefore "represents a change to the group's planning assumptions for 2020". No financial guidance provided, as situation deemed "too fluid". Board and executive team agree to 20% pay cut with the incentive plan award postponed. Sales activity below normal and decision-making on new business more drawn out. Even in long and severe' disruption, should be able to retain enough liquidity and profitability to meet its banking covenants. Withdraws final dividend proposal, preserving around GBP6 million in cash.
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GlobalData PLC - data, analytics and insights - Has not needed to furlough employees or rely on government support as it has quickly transitioned to remote working. More than 75% of the firm's revenue comes from recurring subscriptions and is thus mostly unaffected by the virus with "good visibility for the remainder of the year". However, some Events business revenue has been deferred to the second half of 2020, though Events represents less than 10% of group revenue. Delays payment of 2019 final dividend by 30 business days to June 9 to give more time for assessing the full impact of the virus.
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Equals Group PLC - e-banking and international payments - Accessing government support measures including the use of the UK's coronavirus job retention scheme for around 20% of employees. Given its success in working from home, reviewing its office space requirements, particularly in London. Has modelled multiple scenarios for the business during the pandemic and "is confident of its ability to emerge from the crisis in a strong position". Revenue for the three months ended March 31 was 32% higher than a year previous at GBP8.3 million. Intends to publish its 2019 annual results in late May with an annual general meeting to follow in late June, but these dates are subject to change depending on the course of the pandemic.
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Goco Group PLC - gocompare.com comparison website operator - Continues to recommend payment of a final 0.5p per share dividend for 2019. As at March 31, cash totalled GBP27.4 million and had another GBP22 million of its revolving credit facility undrawn. Also on that date, leverage was 2.1 times compared to 2.2 times at the end of 2019, well below the 3.0 times adjusted earnings before interest, tax, depreciation and amortisation required under its bank covenant. Positive operation cash flow is still expected "under multiple stress scenarios" and its bank facilities run through to October 2023. So far, has not needed government-assisted schemes either for loans or employment. Total revenue from its Price Comparison, AutoSave, and Rewards businesses rose 6% to GP41.5 million first quarter from GBP39.0 million a year before.
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Triple Point VCT 2011 PLC - venture capital trust - Within A share class, consisting predominantly of hydroelectric facilities in the Scottish Highlands, normal commercial operations are expected to continue without being significantly disrupted by Covid-19. This is because such assets need only a low level of human presence to operate. The revenue stack of these assets is not forecast to be hurt by the energy price drop, with hydroelectric companies unlikely to suffer amid current energy market volatility. Within B share class, a drop in annualised power consumption is expected as a result of "reduced manufacturing and the heavy impact Covid-19" on the services industry as people work from home. Further, as people work from home, domestic energy consumption has altered and wholesale prices have declined. "Over the long-term, industry experts believe power consumption and prices will revert to historical norms and therefore we do not currently expect there to be a significant impact on the valuation of these companies based on the long-expected life of the assets," says Triple Point.
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Dialight PLC - industrial LED lighting - Suspends manufacturing operations voluntarily at its Mexican facilities pending the review of its application for an 'essential business' order. The facilities were open until last week, though with a reduced headcount to allow for social distancing. Manufacturing facility in Malaysia has been closed since March 17. Although the majority of manufacturing operations in Malaysia are not set to re-open until after April 28, Dialight also has applied there for an essential business order. "To date, component supply has been resilient, but we are monitoring supply chains closely," says Dialight. First quarter trading met expectations until late March, where there was some softening from its Lighting business. Board and executive team take 20% pay cut and the chair forgoing all fees until after the immediate crisis ends. A number of employees have been furloughed and most salaries have been reduced. Capital expenditure on net projects is on hold pending an evaluation of those projects expected to produce the most revenue after the crisis. Net debt on April 20 was GBP16.2 million. "Our current expectations for the 2020 half year and 2020 full year have significantly reduced since the time of our 2019 full year results announcement," says Dialight.
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By Anna Farley; annafarley@alliancenews.com
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