Redcentric Regulatory News (RCN)

Redcentric plc

Trading Update and Results Date

Redcentric plc (AIM: RCN) ("Redcentric" or the "Company"), a leading UK IT managed services provider, is today pleased to issue a trading update.

Trading Update

The Board has been encouraged by the Company's trading performance in the year to date, with recurring revenue orders received in Q1 FY21 expected to be marginally ahead of Q1 FY20 and significantly ahead of the Board's expectations at the time of the last trading update and COVID-19 update released on 3rd April 2020. In addition, customer installations in the quarter are expected to be significantly higher than the equivalent period last year and ahead of expectations at the time of the last trading update.

The data centre and network restructuring programme will be largely complete by the end of June 2020 and the Company now expects to deliver annualised cost savings in FY21 and onwards of slightly more than the £2.8m previously announced.

The Company continues to monitor government recommendations relating to COVID-19 in both the UK and India and is taking all safety precautions necessary to ensure the continued wellbeing of its customers and employees. The majority of employees continue to work remotely and no employees have been furloughed to date.

Following the positive start to the year, the Board remains appropriately cautious on future trading due to the uncertainty around the economic effects of the COVID-19 pandemic. Whilst demand for new business in Q1 FY21 has been strong, the Company has also experienced customers deferring decisions on largescale IT projects due to COVID-19.

Cash and Liquidity

Cash collection has been strong with over 90% of the FY20 year-end trade debtor balance collected to date whilst also providing deferred payment support to some customers who have been badly affected by COVID-19. No significant bad debts have been incurred.

As recently announced, the Company has committed banking facilities to 30th June 2022, which comprise a £17.5m revolving credit facility ("RCF"), and a £5m asset financing facility ("AFF"). At today's date £10m is currently drawn on the RCF and £2m on the AFF leaving headroom of £10.5m.

Dividend

The Board remains committed to a progressive dividend policy but given the continued uncertainty resulting from the COVID-19 pandemic and today's announcement regarding the restitution scheme, the Board has decided not to recommend the payment of a final dividend in respect of FY20 to shareholders. The Company will reinstate dividend payments once the outlook becomes more certain.

FY20 Results Date

As announced on 19th June 2020, the audited results will be published on 21st July 2020.

Trading for the year to 31st March 2020 was in line with the Board's expectations and pre IFRS16 net debt at 31st March 2020 was £13.5m, as announced on 3rd April 2020.

Enquiries:

Redcentric plc +44 (0)800 983 2522

Peter Brotherton, Chief Executive Officer

David Senior, Chief Financial Officer

finnCap Ltd - Nomad and Broker +44 (0)20 7220 0500

Marc Milmo / Simon Hicks (Corporate Finance)

Andrew Burdis / Sunila de Silva (ECM)

END