NMCN.L Regulatory News (NMCN)

NMCN PLC

AGM TRADING UPDATE

nmcn PLC ("the Company" or "the Group" or "nmcn"), a leading engineering and construction company, delivering major water, built environment and critical national infrastructure projects across the UK, has released a first quarter trading update to coincide with its Annual General meeting which will be held at 12.00 noon today. All figures in this update are unaudited, unless otherwise stated.

Overview

The Board is pleased to be able to report that the Group had made a good start to 2020, prior to the COVID-19 pandemic. In the first quarter, revenue increased by 3.7% to £97.9 million and pre-tax profit was up by 5.9% to £1.8 million.

COVID-19 Response

In response to the COVID-19 situation we have taken all appropriate steps to protect the health and wellbeing of our staff, customers, and suppliers and to fully comply with Government requirements and guidance as our highest priority. The positioning of the business to emerge from this period in the strongest possible condition, has been guided by our Positive Impactive Plan (ESG policies) and we have continued to remain a responsible member of the communities in which we operate.

During the lockdown period, we maintained our operations in sectors of critical national infrastructure supporting the COVID-19 response, where safety and regulation permitted. More recently we have continued to re-open virtually all our other projects successfully. During April and May, the Group's activities represented in excess of 75% of the workload we would anticipate in a more normal operating environment. Our operations in the Built Environment business units have been the more disrupted with a temporary cessation of works at most sites.

2020 Trading Update

The majority of the first quarter trading performance reflects the period prior to the COVID-19 lockdown which impacted our operations from March onwards. As referenced above, we have done much to maintain the delivery of our services but for the balance of the year, performance has been, and will continue to be, impacted by disruptions to both order intake and operating efficiency.

Built Environment Segment

Revenue overall for Built Environment increased by £6.8 million to £31.0 million (Q1 2019: £24.2 million) reflecting ongoing organic growth across all business units in the segment. The segment generated profits of £0.2 million (Q1 2019: £0.2 million); the main driver being the continuing performance within the Telecoms unit into 2020. Across the other business units, the impact of the severe weather during the period on Highways and Building, along with the initial impact of COVID-19 on the Building business unit and the investment in the new Power & Industrial team resulted in a small contribution.

Water Segment

The Water business has continued to perform strongly despite a reduction in revenue due to the AMP transition year for many of the segment's customers. Q1 revenues were down by 4.7% to £66.9 million (Q1 2019: £70.2 million), but despite this, profitability increased to £1.6 million (Q1 2019: £1.5 million).

We continue to progress our full asset lifecycle management offering and since the preliminary announcement in April we have secured further orders and frameworks from Anglian Water and the Coal Authority. The segment is well positioned to take advantage of the resurgence in opportunities post the pandemic.

Cash Generation & Working Capital

As at 31st March 2020, the Group's cash position was £11.8 million. There has been a reduction from the previous year due to revenue growth (increasing working capital requirements), the mix of contract and customer payment terms and the continued strategic investment in nmcn Investments. However, we have maintained close cash management protocols and cash preservation measures during the lockdown period and we anticipate cash being at similar level at the half year.

Financial Guidance & Outlook

The Board intends to release its Interim Results on the 6 August 2020. It is anticipated the Group will also be able to give guidance for the full-year at that time, taking into account detailed assessments in relation to the changes in ongoing construction methodology and operational efficiency, brought about by the social distancing challenges of COVID-19 and improved visibility on any potential implications of lockdown recovery on the expected order intake for the balance of the year.

The Group continues to trade profitably and our secured workload for completion in this financial year stands at £314 million. Moreover, we expect to make further strategic and operational progress during the year.

John Homer - Chief Executive - commented:

"We had a good start to 2020 which is reflected in the performance of the business in the first quarter prior to the COVID-19 lockdown at the end of March. Throughout the lockdown we have remained operational where it is safe to do so and complied with all the relevant guidelines.

"I am truly proud of the conduct of all our people in this period of unprecedented challenges. They have responded with flexibility and commitment, reflecting the culture of nmcn that has evolved over many years.

"Challenges remain, but our order intake, balance sheet and positive cash position remain healthy. The non-discretionary spend required in our core markets will hold steady in any economic downturn and we expect to be able to benefit from this in future trading."

25 June 2020

For further information please contact:

nmcn PLC - 01623 515 008

John Homer, Chief Executive

Dan Taylor, Chief Financial Officer

About nmcn

nmcn PLC is a leading engineering and construction company in the UK. Its talented 1,800-strong team offers multi-sector engineering and construction skills, technical innovation, design, and specialist fabrication.

The Company delivers major built environment and water industry projects across the UK - from buildings and highways to large-scale water networks and treatment plants. With its history dating back to 1946, nmcn now has 12 UK offices and four off-site manufacturing facilities.

www.nmcn.com

This disclosure is made in accordance with Article 19 of the EU Market Abuse Regulation 596/2014.