Forterra plc Update on Covid-19 (4163H)
25 March 2020 - 1:50AM
UK Regulatory
TIDMFORT
RNS Number : 4163H
Forterra plc
24 March 2020
FORTERRA plc
24 March 2020
Update on Covid-19
Forterra plc, a leading UK producer of manufactured masonry
products, provides an update on Covid-19 and the measures it is
taking to mitigate the impact on its business.
Colleagues and customers
The health, safety and wellbeing of our employees remains our
primary concern and we have already taken prompt action to allow
our colleagues to work from home wherever possible and eliminated
all unnecessary travel.
In light of the new Government guidance, and in order to protect
our workforce, the Board has decided to suspend all business
operations as soon as possible until further notice. In some cases
shutting down our facilities in a controlled and safe manner will
take several days, and we will take all necessary measures to
ensure our factories can efficiently resume production at the
appropriate time.
The Board welcomes the Government's announcement that funding
will be available to ensure employees can still be paid a
proportion of their salary during a period of furlough and
anticipates making use of this facility.
Balance sheet and liquidity
The Group enters this uncertain time with a strong balance
sheet. We ended 2019 with net debt (pre IFRS 16) of GBP43.2m. This
represents a multiple of 0.6 times EBITDA on a pre IFRS 16
basis.
The Group has access to a GBP150m revolving credit facility
extending to July 2022. In recent days the Group has taken the
precautionary action of drawing this facility. At the present time
the Group has cash reserves of cGBP70m and access to an undrawn
overdraft facility of GBP10m. In addition, the Group's credit
agreement includes a GBP50m uncommitted accordion facility on the
same terms as the main facility.
We are in regular discussion with the Company's lenders, all of
whom remain supportive, to understand what future funding options
may be available to the Company in light of recent Government
announcements.
Actions
Given the unprecedented level of uncertainty we now face with
significant economic disruption ahead, the Board has taken several
immediate actions to protect the Group's liquidity position
including:
Cost reduction and cash preservation: Prior to the decision to
temporarily cease operations we had already taken actions to halt
all non-essential discretionary expenditure. Existing commitments
for capital expenditure will be honoured although we expect our
suppliers and contractors to also face significant disruption in
the coming months. No new commitments will be entered into. The
Board remains committed to the completion of the new Desford brick
factory although the phasing of expenditure will be flexed
according to circumstance.
2019 final dividend suspended: Our recent full year results
announcement stated that the Board would propose the payment of a
final dividend of 7.5 pence per share. If approved by shareholders
at the AGM this would lead to a cash outflow of cGBP15m in July.
Whilst the Board recognises the importance of the dividend to
shareholders, in the current circumstances the Board feels that it
is no longer appropriate to make this payment and this resolution
will be removed from the AGM notice sent to shareholders in the
coming weeks.
At this stage the Board is unable to quantify what impact
Covid-19 and the actions we are taking will have on the 2020
results and as such is currently unable to provide meaningful
guidance on future earnings.
Upcoming AGM
The Company's AGM is currently scheduled for 14 May 2020. This
is being kept under review and a further announcement will be made
in due course.
Enquiries:
Forterra plc: +44 (0) 1604 707 600
Stephen Harrison (CEO) / Ben
Guyatt (CFO)
FTI Consulting : +44 (0) 20 3727 1340
Richard Mountain/Nick Hasell
Further information relating to the Company and its group can be
found at www.forterraplc.co.uk .
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END
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