DWF Group PLC DWF ENHANCES LIQUIDITY POSITION (7237K)

TIDMDWF

RNS Number : 7237K

DWF Group PLC

24 April 2020

DWF Group plc

("DWF" or "the Company")

LEI: 213800O9QREOHTOGQ266

24 April 2020

This announcement contains inside information.

DWF ENHANCES LIQUIDITY POSITION

Further to the statement of 27 March 2020, DWF Group plc ("DWF" and, together with its subsidiaries and subsidiary undertakings, the "Group"), a global legal business, is pleased to announce that it has secured an in principle agreement to increase its committed Revolving Credit Facilities ("RCF") and a relaxation of certain covenants with its lenders.

This agreement will result in a secondary RCF of GBP15m, in addition to the Group's existing RCF of GBP80m. The secondary facility, which will operate under the same terms as the Group's existing RCF, will remain in place for up to 18 months. While the Group does not anticipate an immediate need to use this additional facility, it will provide greater liquidity at a time when the normally high level of seasonal cash collections could be impacted by COVID-19.

As a result of this additional facility, the Group will have access to working capital facilities of GBP122m, including the benefits of all of its funding arrangements.

The agreement will also result in a relaxation of the Group's 1.5x leverage covenants for the next four testing dates. The relaxation will allow for leverage of 2x EBITDA in April and July 2020 and 1.75x EBITDA in October 2020 and January 2021. This will provide the Group with the appropriate headroom to deal with any COVID-19 headwinds throughout the coming year.

The combination of the additional financing together with the operating cost mitigation measures is expected to give the Group significant liquidity to see it through an extended lock-down. The Board is confident that the Group can navigate the COVID-19 crisis and deliver its strategy over the longer term as the trading environment normalises.

Andrew Leaitherland, Group CEO at DWF, said:

"Today's announcement demonstrates DWF's strong relationship with its lenders and we are pleased with their continued support. These actions will help to ensure we retain strong liquidity to navigate the challenges presented by COVID-19.

"We are well placed to deal with the current economic pressures through our resilient, counter-cyclical business model. While activity levels in some areas of our business have reduced due to COVID-19, we are beginning to see an increase in activity and revenue opportunities in other areas, including insurance. We continue to win new appointments, including to BT's new legal panel, which will provide access to more complex work in addition to our Managed Services contract. We are also seeing a growing interest in our Managed Services offering, as clients take cost out of their business at this critical time. In addition, we have implemented our cost saving programmes which are anticipated to deliver a material benefit in FY21."

DWF intends to release a trading update in the second half of May for its financial year ending 30 April 2020.

For further information

DWF Group plc

   James Igoe - Head of Communications                  +44 (0)20 7280 8929

Finsbury (PR advisers to DWF)

   Ed Simpkins                                                                +44 (0)20 7251 3801

Charles O'Brien

The person responsible for arranging for the release of this announcement on behalf of the Company is Chris Stefani, Group Chief Financial Officer.

About DWF

DWF is a global legal business providing Complex, Managed and Connected Services, operating from 33 key locations with approximately 4,200 people. The Company became the first Main Market Premium Listed legal business on the London Stock Exchange in March 2019. DWF recorded revenue of GBP272.4 million in the year ended

30 April 2019. For more information visit:   www.dwf.law

Forward-looking statements

This announcement contains certain forward-looking statements with respect to the Group's current targets, expectations and projections about future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan" "estimate", "expect" and words of similar meaning, include all matters that are not historical facts and reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. The Company does not assume any obligation to update or correct information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

MSCFFFLLSRIVFII

(END) Dow Jones Newswires

April 24, 2020 02:00 ET (06:00 GMT)

Dwf (LSE:DWF)
Historical Stock Chart
From Mar 2024 to Apr 2024