(Alliance News) - Shares in Ascential PLC rose on Wednesday, after the data and events firm said it relaxed its banking covenants and reported it has found up to GBP40 million in extra annual cost savings.
Shares were 10% higher at 254.40 pence each in London on Wednesday morning.
Ascential, which has been forced to cancel the Cannes Lions festival and other events it runs due to Covid-19, said covenant testing in December has been waived.
In addition, its debt ratio limit for the June 2021 testing point has been relaxed to 3.75x from 3.25x, providing the FTSE 250 firm with "greater flexibility".
"The majority of Ascential's revenues come from robust digital subscriptions and platforms and high repeat advisory revenue streams. However, the company does derive 25% of its revenue from live events and 8% from its Cannes Lions benchmark product," Ascential said.
In addition to cost-savings measures announced already, including suspending its 2019 final dividend payment and share buyback programme, Ascential said it has found between GBP20 million and GBP40 million in further cost savings.
In its first quarter ended March 31, revenue came solely from its Digital Subscription & Platforms and Advisory businesses, due to events being cancelled.
Revenue from the two units which remained up and running were 5.1% higher on an organic basis.
Digital Subscription & Platforms revenue was up 19% on the year before, amid "solid subscription renewals", while the Advisory business suffered a 16% fall.
Chief Executive Officer Duncan Painter said: "Our businesses made a positive start to 2020 considering the circumstances. With the deferral of events to the second half, trading in the first quarter has been exclusively from our Digital Subscription & Platforms and Advisory businesses.
"The covenant amendments we have announced today, combined with prudent cost measures, ensure that our business remains well set to weather the impact of Covid-19, and I would like to extend my thanks to our banking group for their strong support for the company."
By Eric Cunha; ericcunha@alliancenews.com
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Ascential (ASCL)