(Alliance News) - Stobart Group Ltd said Monday it is exploring funding options to handle the fallout caused by Covid-19.
The logistics firm said its focus is on protecting its liquidity and cashflow.
This includes: a freeze on all capital expenditure spend other than where it is considered critical; furloughing over 1,500 employees; the board and senior leadership taking a 20% pay cut, with non-furloughed management taking a 10% cut; and putting in place a hiring freeze.
"These steps have been taken both to maintain the operational capability of our core businesses and ensure they are well placed to gear back up when the recovery takes place. At all times we have committed, as a responsible business, to follow all Government advice," Stobart said.
The company continued: "The cumulative effect of these actions is to preserve the group's liquidity and provide cash headroom. Given the level of current uncertainty, particularly regarding the potential duration of the crisis, the board is also taking prudent steps to explore further funding options."
Stobart has also withdrawn its guidance for 2020.
Chief Executive Warwick Brady said: "The challenges presented by the rapid spread of the Covid-19 virus have been significant. However, I am immensely proud and humbled by the response of our people to this global crisis. We have acted at pace to put in place steps to safeguard our business in the immediate term, and our people have consistently understood and supported the actions we have taken.
"Despite the current challenges presented by the Covid-19 virus, we continue to own and operate aviation and energy assets with significant underlying value. There remain significant medium and long-term opportunities to further increase the value of the assets for our stakeholders."
Shares in Stobart Group were 7.1% higher in London on Monday at 49.25 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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