RA International Group PLC COVID-19 update (4014I)
April 01 2020 - 5:41AM
UK Regulatory
TIDMRAI
RNS Number : 4014I
RA International Group PLC
01 April 2020
1 April 2020
This announcement contains inside information
RA INTERNATIONAL GROUP PLC
("RA International" or the "Company")
COVID-19 update
RA International Group PLC (AIM: RAI), a leading provider of
services to remote locations in Africa and the Middle East,
announces today the impact of COVID-19 on its business and
operations.
Since the COVID-19 outbreak began, RA International has been
assessing the potential effects the pandemic may have on its
business, and that of its clients and suppliers. Up until very
recently the impact was limited to potential supply chain
disruptions, which could be overcome, however with lockdowns and
social distancing measures now being implemented across Africa, the
Company's primary operating environment, the impact of COVID-19 is
having on our operations is increasing.
RA International's first priority is the health and safety of
its employees, customers, suppliers and other partners, and
Management will continue to take all precautions to ensure their
health and well-being during this unprecedented situation. The
Board has taken a number of actions to mitigate the potential risk
to the Company's employees and customers by implementing a
companywide contingency plan based on WHO standards. The Board
continues to closely monitor the COVID-19 situation, and intends to
follow all recommended government guidelines, to ensure a healthy
workforce at our locations.
As a Company specialising in working in demanding environments
we are prepared for situations such as these in that we maintain
months of supplies to ensure the safety and security of our staff
and so as we can provide uninterrupted service to our clients in
times of crisis. In many locations we generate our own power, pump
and treat our own water, provide our own waste management, and
provide all other life support services, including running our own
medical centres for our staff. Additionally, with significant cash
reserves and no debt the Company is well capitalised and has
adequate liquidity to ensure it can meet its near and medium-term
financial obligations. As a result, we do not anticipate any
incidences where the Company will not be able to fulfill its client
commitments.
While the Company remains fully operational other than being
impacted by global travel restrictions, as a result of the
accelerating implementation of social distancing measures over the
past week some of our clients have engaged with us to explore
suspending or slowing ongoing construction projects. In most cases
the rationale given is to limit personnel working in and around
client premises. While we continue to engage with our clients and
advise them on our strict COVID-19 Health and Safety protocols with
respect to continuing works, it is clear that while in many cases
works will continue, they will do so at a reduced pace and with
decreased efficiency. In many cases the Company will be reimbursed
for incremental costs incurred as a result of client requested
suspensions or other changes, but even in cases where project
margins will not be significantly affected, we anticipate that a
material value of revenue will shift from 2020 to 2021.
With respect to service contracts, we are liaising with a number
of clients who, as with construction contracts, have requested we
limit the number of staff working at their facilities. In addition,
we see clients evacuating from remote facilities and requesting
that we maintain a skeleton staff on hand so as to ensure
infrastructure is maintained during their absence. The effect of
these scope changes, even if limited to a three month period, will
nevertheless have some impact on both short-term revenue and profit
margins in 2020.
We have strong relationships with our clients and are having
open and honest discussions as to how the requested project
schedule or scope modifications will impact our staff working on
these contracts, the impact of which is expected to
disproportionately affect our local national staff. We are
currently assessing possibilities to safeguard their incomes and
some customers have agreed to share the cost of wages for staff
who, through no fault of their own, are now unable to access client
facilities and perform regular duties. We are also retraining staff
to offer sanitisation services or other in-demand activities and
pursuing new opportunities such as medical infrastructure
construction, the management of isolation facilities and
disinfection of larger spaces including offices and public
facilities. We believe we have a responsibility to all stakeholders
during this time of crisis and have confidence in the
sustainability of our business model. We see this as a temporary
problem and reiterate our support to all of our staff and their
families in this difficult time.
The spread of COVID-19 continues to heighten and is having a
significant impact on global economic activity. Until there is
clarity on the duration and severity of these events, it is not
possible to quantify the financial impact COVID-19 might have on
the Company. We cannot estimate with a degree of certainty when
contract suspensions will be lifted or when service levels will
return to normal. In addition, some business development activity
has slowed as a result of site visits being cancelled. Accordingly,
whilst we do not believe that COVID-19 will necessarily result in
the cancellation of contracted project activity, the scheduling of
some projects is unclear and we anticipate that a number of
projects will be delayed, and certain projects forecast to commence
in H2 2020 will now take place during 2021.
Whilst there is the potential for a material effect on our FY20
financial results as a result of the current situation, we believe
that when COVID-19 is contained or possibly sooner, we will return
to work as normal, executing against our USD 140m order book and
continuing to bid for new and exciting projects. In the meantime we
will continue to advocate with our customers to allow us to execute
our projects in planned timelines, taking all necessary and
recommended precautions. We believe that continuing economic
activity is integral to ensuring that vulnerable communities do not
collapse in these unprecedented times.
* * * * *
Enquiries:
RA International Group PLC Via Hudson Sandler
Soraya Narfeldt, Chief Executive Officer
Lars Narfeldt, Chief Operating Officer
Andrew Bolter, Chief Financial Officer
Cenkos Securities PLC (Nominated Adviser
and Broker)
Derrick Lee +44 (0)131 220
Peter Lynch 6939
Hudson Sandler LLP (Financial PR & IR) +44 (0)207 796
Daniel de Belder 4133
Bertie Berger rainternational@hudsonsandler.com
About RA International
RA International is a leading provider of services to remote
locations in Africa and the Middle East. The Company offers its
services through three channels: construction, integrated
facilities management and supply chain, and services three main
client groups: humanitarian and aid agencies, governments and
commercial customers, predominantly in the oil and gas and mining
sectors. It has a strong customer base, largely comprising UN
agencies, western governments and global corporations.
The Company provides comprehensive, flexible, mission critical
support to its clients enabling them to focus on the delivery of
their respective businesses and services. Focusing on integrity and
values alongside making on-going investment in its people,
locations and operations has over time created a reliable and
trusted brand within its sector.
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END
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