4imprint Group PLC Coronavirus (COVID-19): Update (9749I)
April 07 2020 - 2:00AM
UK Regulatory
TIDMFOUR
RNS Number : 9749I
4imprint Group PLC
07 April 2020
07 April 2020
4imprint Group plc ("4imprint" or the "Group")
Coronavirus (COVID-19): Update
4imprint today provides a further update on the effect of the
COVID-19 pandemic on the Group's trading and operations.
In our previous COVID-19 update dated 19 March 2020, we
indicated that daily order counts had reduced to around 40% of
prior year, reflecting the impact of the initial spread of the
disease and associated bans on travel and large gatherings. Since
then, 'Safer at Home' or similar directives in nearly every state
in the US and all of the UK have resulted in daily order counts
that have been running at about 20% of the 2019 comparative. We
anticipate that this limited level of activity is likely to
continue until these restrictions begin to be lifted and economic
activity starts to improve. Although our locations in Oshkosh,
Wisconsin and Manchester, UK are closed, the business is running
and we are able to provide service to our customers through an
expanded 'work from home' capability.
Our people remain our first priority. We continue to operate in
compliance with the latest governmental guidelines to ensure their
health and safety. In line with our culture, and to enable us to
capitalise rapidly on opportunities presented by a future recovery,
our plan prioritises the retention of our team members. It is
possible that certain government programmes will be accessible to
4imprint to assist in this regard.
Cost control and cash conservation are top of mind in all areas
of the business. Discretionary cost, whether overhead or capital,
is being tightly controlled in order to provide the business with
maximum flexibility going forward. After cost of product, marketing
is the largest expense in the business. The marketing portfolio has
been radically re-shaped in a very short space of time, resulting
in a mix that is appropriate to current circumstances in terms of
both type and cost, but equally provides a firm platform to take
full advantage of improving conditions when they occur.
4imprint remains in a strong financial position, with
significant liquidity available to weather the storm and emerge in
a favourable position. At the end of the first quarter of 2020 the
Group had over $50m in cash balances. Given the inherent
uncertainty as to how quickly markets might recover, and in order
to maintain maximum flexibility, the Board has taken the prudent
step of withdrawing its recommendation to pay a final dividend in
May 2020. The dividend of 59.00c will no longer be paid and will
result in extra cash of around $16m being available to the Group.
The Board has not fundamentally changed its dividend policy, and it
will reassess its position in coming months as the situation
becomes clearer.
Whilst we are taking decisive action on cash conservation and
are fully engaged in the continuous refinement and execution of our
plan to ensure that the Group emerges in a strong position for the
long term, we believe it is still too early to assess the duration
and full economic impact resulting from COVID-19. We therefore
provide no forward guidance at this stage for 2020.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/ 2014. The person who
arranged the release of this announcement on behalf of 4imprint was
David Seekings, Chief Financial Officer of 4imprint.
For further information, please contact:
4imprint Group plc MHP Communications
Tel. + 44 (0) 20 3709 9680 Tel. + 44 (0) 20 3128 8100
Kevin Lyons-Tarr Katie Hunt
Chief Executive Officer
David Seekings Rachel Mann
Chief Financial Officer
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END
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