Marshalls PLC COVID-19 update (7918H)
March 27 2020 - 3:00AM
UK Regulatory
TIDMMSLH
RNS Number : 7918H
Marshalls PLC
27 March 2020
27 March 2020 LEI: 213800S21IFC367J5V62
COVID-19 update
Marshalls plc, the specialist landscape products group, issues
an update on the impact and the measures it is taking in response
to the COVID-19 outbreak.
In view of the Government's increasing measures to contain the
spread of the virus in the current challenging environment, the
Group is taking actions to ensure the health and wellbeing of
employees, customers and suppliers and to support the long-term
interest of the business.
Operational actions
The Group is implementing an agile, operational plan to manage
all parts of the business safely, whilst continuing to support
customers where there is demand. We are continuing to distribute
product where demand exists, but in those parts of the business
where demand has fallen we are managing the manufacturing
facilities carefully and commencing a process of temporary
suspension of operations. These actions will protect cash flow
generation and contain costs. Non-essential capital expenditure has
been deferred, but not at the expense of health and safety. Our
operational planning is dynamic and able to react to the changing
environment. The majority of our office-based employees are now
safely working from home. We are adhering closely to official UK
Government guidance.
Financial position
The Group has a strong balance sheet supported by a flexible
capital structure and we maintain significant headroom against bank
facilities. We conduct deep stress testing on a regular basis to
support this position. We have a range of committed facilities in
place with a spread of maturity dates that extend out to 2024. The
Group's total bank facilities are currently GBP165 million of which
GBP140 million are committed. As at 25 March the Group had GBP93
million of net debt (on a pre-IFRS 16 basis) of which GBP82 million
was committed. Consequently, GBP72 million of facilities remain
unutilised of which GBP58 million is committed.
Our bank covenants are for the ratio of EBITA to interest charge
to be greater than 2.5 times and for the ratio of net debt to
EBITDA to be less than 3.0 times. All bank covenants are on a
pre-IFRS 16 basis. Interest cover and net debt to EBITDA covenants
were comfortably met for the year ended 31 December 2019 at 42.6
times and 0.2 times respectively.
We maintain positive and constructive relationships with all our
banking partners. Our short term cash flows will also benefit from
many of the initiatives announced by the Government.
2019 Final and Supplementary dividends
In the current circumstances, however, the Board believes it is
important to preserve the Group's strong financial position and,
consequently, that it is now appropriate to cancel the 2019 final
dividend of 9.65 pence and the previously announced supplementary
dividend of 4.00 pence. These were previously proposed with the
announcement of the full year results for 2019 on 12 March 2020. As
a result, the approval of these previously proposed dividends will
not be put before shareholders at the AGM. The cash saving from
this measure will be GBP27.1 million.
Outlook
As a consequence of the current levels of uncertainty, which are
unprecedented, it is not possible at this time for the Group to
provide an accurate assessment of trading for the current year and
accordingly all previous market guidance is now being withdrawn. We
will provide a further update when there is greater clarity about
the impact of COVID-19.
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) ("MAR") prior to its release as part
of this announcement and is disclosed in accordance with the
Company's obligations under Article 17 of those Regulations.
Enquiries:
Martyn Coffey Chief Executive Marshalls plc +44 (0)1422 314777
Jack Clarke Group Finance Director Marshalls plc +44 (0)1422 314777
+44 (0)20 3128
Andrew Jaques MHP Communications 8540
Charlie Barker
Note to the Editor:
About Marshalls:
Established in the late 1880s, Marshalls is the UK's leading
manufacturer of superior natural stone and innovative concrete hard
landscaping products, supplying the construction, home improvement
and landscape markets. Marshalls provides the product ranges,
design services, technical expertise, innovative ideas and
inspiration to transform gardens, drives and public and commercial
landscapes.
Marshalls operates its own quarries and manufacturing sites
throughout the UK, including a national network of manufacturing
and distribution sites, and has operations in Belgium and sales
representation in other international markets. As a major plc,
Marshalls is committed to quality in everything it does, including
the achievement of high environmental and ethical standards and
continual improvement in health and safety performance.
Forward-Looking Statements:
Any statements in this release, to the extent that they are
forward-looking, are subject to risk factors associated with,
amongst other things, the economic and business circumstances
occurring from time to time in the markets in which Marshalls
operates. It is believed that the expectations reflected in these
statements are reasonable but they may be affected by a wide range
of variables which could cause actual results to differ materially
from those currently anticipated. More information about the
factors that may affect Marshalls' performance is contained in the
Annual Report to shareholders for the year ended 31 December
2018.
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contact rns@lseg.com or visit www.rns.com.
END
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