Goodwin PLC COVID-19 and Liquidity Update (1807P)
08 June 2020 - 4:00PM
UK Regulatory
TIDMGDWN
RNS Number : 1807P
Goodwin PLC
08 June 2020
GOODWIN PLC (the "Company" or the "Group")
COVID-19
Whilst there has been global disruption gripping the world with
the onset of COVID-19 since January, the Company is pleased to
confirm that its UK companies have remained open for business since
the start of the pandemic, taking appropriate measures in
accordance with government guidance.
The overseas operations have been working in accordance with
their local legislation, and wherever legally allowable, remaining
operational. There are currently no Goodwin Group companies closed
for business.
With the disruption in the last quarter of the financial year
ended 30th April 2020, there have been delays in executing certain
capital goods contracts due to the Company's customers' inability
to travel. However, with limited international travel and social
distancing becoming the new 'norm', working practices have been
adapted for business to continue in a routine manner.
The medium-term impact of COVID-19 is becoming clearer, and the
Company is pleased to confirm that the manufacturing of its
engineering capital goods should continue positively as expected,
with the Group's current record forward order book of GBP177
million (some 94% higher than the average for the past 6 years)
being predominantly for projects and applications that are not
consumer orientated. So, with newly adapted working practices that
we along with our customers could not have envisaged doing only six
months ago, the business continues to progress.
The Group's UK and overseas refractory companies, whilst all
operational, primarily manufacture products utilised in the
manufacture of luxury consumer goods and in construction
industries. Whilst in May they have been fulfilling existing
orders, they are now predicting a 20%-25% reduction in consumer
business activity for the next few months. However, the elements of
the business making refractories used for the manufacture of
industrial goods are expected to fare much better.
Liquidity
The Group remains in a financially resilient position. Cash flow
and net debt are in line with the Board's expectations, with the
Company only utilising approximately 50% of its GBP50million
traditional debt facilities.
Due to initial uncertainty surrounding COVID-19, the Board has
secured an additional credit line through the Bank of England Covid
Corporate Financing Facility (CCFF) as an insurance policy. So if
faced with the unexpected, such as payment delays by customers and
/or temporarily increased work in progress should projects be
delayed and /or a major second pandemic peak, we would have
sufficient financial resources to weather the storm, enabling the
Board to continue to focus on doing what is right for the business.
The committed, 100% UK Government backed commercial paper facility
option would bolster our liquidity headroom by up to GBP30million
if the Board deems it prudent and appropriate to utilise.
We are not aware of any adversity looming and in line with
custom and practice, approximately 80% of the Group's debtor book
remains covered by credit insurance and / or cash positive stage
payments. Furthermore, the Group's reported gearing ratio as at the
31st October 2019 of 27% has improved and as things stand, we do
not envisage a deterioration.
The Board continues to be focused on resilience through cash
conservation, close control on expenditure and matching the
overheads of individual Group companies to their current or
expected level of activity, thus limiting as far as possible any
impact on the Group's revenue and profitability.
Enquiries: Jenny Martin, Company Secretary +44 (0)1782 220332
LEI: 213800N4T1NMSJ57B322
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END
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