NMCN PLC Further Covid-19 Update (5438J)
14 Aprile 2020 - 11:00AM
UK Regulatory
TIDMNMCN
RNS Number : 5438J
NMCN PLC
14 April 2020
14 April 2020
nmcn PLC
("nmcn" or the "Company" or the "Group")
Further Covid-19 Update
As previously stated, nmcn will be reporting its 2019
Preliminary Results on Thursday 23 April. However, in light of the
extraordinary circumstances emerging from the Covid-19 virus we
want to update stakeholders further on how we are responding. nmcn
is endeavouring to take all appropriate steps to protect the health
and wellbeing of its staff, customers and suppliers and to fully
comply with Government requirements and requests.
Furthermore, we continue to seek to be a responsible member of
the communities in which we operate and serve, whilst positioning
our business to emerge from this unprecedented period in the
strongest possible condition.
Operational implications
The potential impact of Covid-19 on the Group's trading
performance for the balance of 2020 remains unclear. We are
experiencing disruption in certain areas, but where safe to do so,
nmcn continues to be operational across many of its sectors. In
Water, which accounts for circa two thirds of our overall revenues,
we are working closely with our customers, across multiple business
workstreams, that are designated by the Government to be critical
to the Covid-19 response. There is a clear commitment and ongoing
demand for our directly delivered services.
Built Environment, Telecommunications and Highways have also
been designated 'critical sectors' and we remain operational to
some degree here too, with the workforce engaged in all areas where
we have framework and ongoing contractual requirements. Our
services in Building have been disrupted with a temporary cessation
of works at the majority of our sites.
Where it is safe to do so, we continue to work on those projects
that are deemed to be in areas of critical national significance to
the Covid-19 response. Presently such activities represent up to
70% of the workload we would anticipate in a more normal operating
environment.
Financial implications
Since the escalation of the Covid-19 pandemic, the Board has
been focussed on taking actions to preserve cash and protect
liquidity in a way that does not compromise the long-term prospects
of the business. To this end we have implemented a temporary and
voluntary reduction in the remuneration of the Board of 20% and a
10% reduction for the senior management team (effective 1 April
2020). All non-essential capital and overhead expenditure has now
been deferred, and a hiring freeze has been implemented along with
various other cost reduction initiatives. Measures taken to reduce
cash outflows include the deferral of VAT payment, financing costs,
and utilisation of the Government's Job Retention Scheme.
As part of a review of capital allocation across the business,
and recognising the uncertainties posed by the Covid-19 crisis, in
particular the possibility of further restrictions or extended time
frames, the Board will not be recommending a final dividend for
2019. The Board is very mindful of the importance of dividends to
all shareholders and should circumstances permit a special interim
dividend may be made later this year. The 2019 Directors' bonus
payments are currently being deferred along with the vesting of the
2017 LTIPs. No new LTIPs will be awarded until the current
uncertainties have diminished.
As a result of our prudent approach to the balance sheet we
entered 2020 with a net cash position in excess of GBP25.8 million
(unaudited), but in order to provide headroom and flexibility in
the current circumstances, additional borrowing facilities are
being considered by the Board. Working capital, in particular, will
be important to address the opportunities that a recovering market
may present. Discussions are also progressing with Lloyds Bank to
utilise the recently announced Coronavirus Large Business
Interruption Loan Scheme (CLBILS).
We believe these actions to be prudent in light of the uncertain
macro outlook, and notwithstanding the essential nature of much of
the work we undertake and the covenant strength of our customers.
With the commitment of a highly skilled and dedicated workforce, we
are adjusting to the evolving challenges of a global event. The
Board is confident of the Company's ability to survive the storm
and to emerge as a strong contender in its chosen markets, yet we
are not able to quantify the likely impact on the 2020 full year
results at this stage and consequently the Board does not believe
it appropriate to provide forward looking financial guidance until
greater visibility is available.
A further update on current trading will be provided with the
Preliminary Results on Thursday 23(rd) April.
Chief Executive Officer, John Homer, commented:
"I would like to thank all my colleagues within nmcn and our
external stakeholders for their flexibility and resolve in
addressing such extraordinary circumstances. We seek to produce a
holistic response to the challenges of Covid-19 which balances
self-help with Government initiatives in a commercially robust but
fair manner."
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 1800-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.
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