Healthcare Locums PLC Company update (2033W)
23 Gennaio 2013 - 1:18PM
UK Regulatory
TIDMHLO
RNS Number : 2033W
Healthcare Locums PLC
23 January 2013
Healthcare Locums plc
("HCL" or the "Company")
Company Update
The Board of Healthcare Locums plc, a leading provider of
staffing solutions in the health and social care sectors provides
the following update for the 52 weeks ended 30 December 2012.
On 28 September 2012 the Company announced its interim results
for the 26 weeks ending 1 July 2012 (the "Interims"), which
highlighted the key issues facing the business. The Company had
suffered difficult trading conditions in both of its two geographic
markets, the UK and Australia. In addition, and as a result of the
poor trading conditions, the Company had agreed with its lending
banks that they would reset covenants and defer the start of the
repayment of the loan principal until June 2013.
Since that date, trading has continued to be difficult. In
particular:
-- In the UK, delays in NHS framework renewals have continued to
constrain the Group's ability to capitalise on its strategy of
moving to higher volume lower margin framework contracts in the UK.
This uncertainty is expected to continue into 2013. This has
depressed the performance of both the Doctors and Allied Health
Professional divisions. In the second half, the Nursing division
successfully implemented a new IT system, however this necessary
diversion delayed the business's ability to capitalise on the
significant demand in this market and impacted its short term
results. Further, the Social Care division has remained under
margin pressure as Local Authorities continue to reduce
budgets;
-- In Australia, weakness in demand in the private and public
sectors has continued as the macro economy has deteriorated.
Although the Company has made senior management changes and placed
a renewed focus on key public sector clients, the current
uncertainties in demand make Australia a challenging market in
which to operate and as a result revenues have been impacted in the
second half of the year;
-- The Company continues to be involved in litigation:
o the first, regarding the former Executive Vice Chairman Kate
Bleasdale; and
o the second, in respect of US based proceedings against the
Company.
Since the Interims there have been no further material
developments with respect to this litigation other than the initial
rejection of Ms Bleasdale's application for an appeal. As allowed
in such an instance, Ms Bleasdale has requested a hearing in front
of a Judge to challenge this decision. The Board remains confident
of its defence in both claims and will strenuously defend its
position.
At 30 December 2012, the Group had A$60m (GBP39m) of term bank
loans and GBP9m cash at bank.
While the Group has met its 30 December 2012 banking covenant
tests, having updated its forecasts and projections to reflect the
current trading conditions, the Board has identified that in order
to deliver these projections there is likely to be a requirement
for additional capital funding in the next 12 months. The forecasts
also indicate that the financial covenants for March and June 2013
may not be met. The Company is in constructive negotiations with
its banking partners regarding resetting the covenants for 2013 and
the Company believes that the banks remain supportive of the
business.
The Board is exploring a number of options to safeguard the
strategy of the business, including ways in which to further reduce
the Group's cost base and improve its profitability. The Board
remains convinced that the Company is pursuing the correct strategy
and is considering all options for the best way forward and the
options regarding access to additional capital for the Company. In
this regard the Board has approached its two substantial
shareholders to ascertain their appetite to provide additional
capital to the Company and, while these discussions are on-going,
they have indicated that they are supportive of the business going
forward. However, no guarantee can be provided until the Company is
able to ascertain the quantum of the fundraising needed and any
terms on which such fundraising could be undertaken. A further
update will be made in due course.
Ends
For further information please contact:
Healthcare Locums plc
Stephen Burke, Chief Executive Officer
Sue Bygrave, Chief Finance Officer
020 7451 1451
Investec Bank plc
Gary Clarence/Patrick Robb/Daniel Adams
020 7597 5970
Pelham Bell Pottinger
David Rydell/Emma Kent/Duncan Mayall/Charlotte Offredi
020 7861 3232
This information is provided by RNS
The company news service from the London Stock Exchange
END
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