Reach4Entertainment Enterprises PLC COVID-19 Update (1976M)
May 07 2020 - 2:00AM
UK Regulatory
TIDMR4E
RNS Number : 1976M
Reach4Entertainment Enterprises PLC
07 May 2020
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ("MAR"). With the publication of this announcement,
this information is now considered to be in the public domain.
7 May 2020
reach4entertainment enterprises plc
("r4e" or "the Company" or "the Group")
COVID-19 Update
Further to the announcement on 20 March 2020,
reach4entertainment enterprises plc (AIM: R4E), the integrated
international marketing group in the live performance and
entertainment markets, provides an update on its response to the
COVID-19 outbreak.
Background
Towards the end of March 2020, shortly following the closure of
all live venues in London's West End and on Broadway, the Group
moved promptly to protect the health and safety of its workforce
and transitioned all of the Group's employees to remote working
wherever possible. As part of its drive for operational efficiency,
through the use of virtualised applications and storage on the
cloud, r4e has enabled secure remote working with no material
reduction in its delivery capability for clients.
The Group continues to await guidance from governments in its
key markets on the easing of lockdown measures for the live
entertainment industry and plotting a path to normal activity.
Management anticipates live theatre performances will be among the
last to emerge from lockdown and restrictions.
COVID-19 Response
The Group responded rapidly to the crisis to implement a number
of mitigation measures to support the liquidity of the business and
its financial position during this period. Actions taken include
the implementation of some organisational restructuring;
furloughing over 50% of staff across the Group benefitting from UK
and US Government payroll schemes; curtailing all non-essential
spend; and, a freeze on M&A activity. Additionally, all r4e plc
senior executives have taken 30-40% reduction in salaries and there
have been salary reductions of between 20-40% implemented for
approximately 30% of the staff with all bonuses being deferred.
Also, all Non-Executive Directors have waived their fees. These
measures, along with permanent cuts in ancillary administration
costs, are expected to reduce monthly running costs by 50% and
generate annualised savings of approximately GBP12 million.
Furthermore, the Group has reduced its cash outflow by 76% to
GBP0.5 million per month, prior to media supplier payments, by
temporarily deferring payments including rent, VAT and PAYE/NI. The
Group has identified further opportunities to make additional cost
savings to improve its financial position.
Outlook
Given the evolving nature of the crisis and the uncertainty over
its length and severity, it is too early to accurately assess the
financial impact that the disruption will have on FY 2020.
Management has explored funding options and also continue to have
positive dialogue with the Company's US owned asset based lending
facility provider, PNC Business Credit, regarding the ongoing
facility. The Group had net cash of approximately GBP10.3 million
at 30 April 2020 (GBP2.75 million at 31 December 2019) excluding
deferred consideration to the Seller of Agency Press Limited ('Sold
Out') and IFRS 16 lease liabilities. This should enable the Group
to continue to meet its working capital requirements whilst it
explores additional funding options, including, but not limited to,
schemes offered from the UK Government and the Small Business
Administration in the US. In the unlikely event that the outbreak
and consequent reduced trading were to continue beyond 2020, the
Board would be required to implement further cost cutting
measures.
Further updates to the market will be made as appropriate.
For information, please contact:
reach4entertainment enterprises Phone: +44 (0)20 3978 8590
plc
Marc Boyan, CEO
Paul Summers, COO
Luther Pendragon Phone: +44 (0)20 7618 9100
Harry Chathli Email: r4e@luther.co.uk
Alexis Gore
Joe Quinlan
Grant Thornton, NOMAD Phone: +44 (0)20 7383 5100
Philip Secrett
Jen Clarke
Seamus Fricker
Dowgate Capital, Broker Phone: +44 (0)20 3903 7715
James Serjeant
David Poutney
About r4e
reach4entertainment enterprises plc ("r4e") operates a
collection of theatrical, film and live entertainment marketing,
PR, advertising and display agencies, across the world. The Company
uses its extensive experience in the live entertainments space to
create value through investing in innovative and established
agencies that provide communications services to a range of clients
involved with theatre, film, concerts and more. For further
information on r4e, you are invited to visit the Company's website
at www.r4e.com .
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END
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