Polypipe Group PLC COVID 19 update (6007H)
26 March 2020 - 1:40AM
UK Regulatory
TIDMPLP
RNS Number : 6007H
Polypipe Group PLC
25 March 2020
25 March 2020
Polypipe Group plc
COVID 19 update
Polypipe Group plc ("Polypipe", the "Company" or the "Group"), a
leading provider of sustainable water and climate management
solutions for the built environment, today provides the following
COVID 19 update.
Employees, customers and operations
The health, safety and wellbeing of our people has always been,
and continues to be, at the forefront of everything we do. The
Group and its leadership team has a duty of care to its employees
and customers, and the evaluation of risk and taking mitigating
actions to protect those employees and customers is taken very
seriously and is very much ingrained in our culture. In light of
recent events and until further notice, we have decided to wind
down our operations to that which is absolutely necessary to
support the Government in its battle with COVID 19 and keep the
economy going. These include the following:
-- Parts of the Group supporting the National Health Service in
very specific roles in increasing capabilities to cope with the
inevitable increase in COVID 19 patients. Our Nuaire business is
manufacturing ventilation for the Royal Marsden Hospital and is
receiving urgent enquiries from many other NHS sites for this as
well as other essential projects.
-- Our Building Products business has been requested to
manufacture special pipe for emergency medical use.
-- On a wider front, it is necessary to keep supplying some of
our plumbing and drainage products that are needed for urgent
repair and maintenance across the country to keep essential
projects and services running.
The reduction in our operations will happen over the next few
days as, for operational reasons, it is not something that can be
done immediately.
Current trading and FY20 guidance
Trading for the year to date has been in line with expectations,
with no material impact on performance from the COVID 19 pandemic
so far. However, the decision to wind down operations, and the
inevitable but as yet unquantifiable wider impact of COVID 19 on
our end markets in the next weeks and months means it is no longer
possible to provide financial guidance for the year ending 31
December 2020 and beyond. Guidance will be resumed when a degree of
normality returns to our markets.
Focus on cash preservation and withdrawal of FY19 final
dividend
It is clear that both revenues and profits will be adversely
impacted in the coming months by the decision to wind down
operations and by the effect of COVID 19 on our end markets. In
response, we have implemented a range of measures to reduce costs
and conserve cash during this period, including utilisation of the
Job Retention Scheme and other measures announced by the
Government.
Whilst the Board recognises the importance of the dividend to
shareholders, as part of its cash conservation plans, the Board has
decided to withdraw its recommendation to pay a final dividend of
8.1 pence per share on 28 May 2020, and this will not now be put to
shareholders at the AGM on 21 May 2020. This decision will ensure
GBP16m cash will be retained in the business that would otherwise
have been distributed which the Board believes is prudent and
appropriate in the current circumstances.
The Group enters this period of uncertainty with a strong
balance sheet and good liquidity. Excluding IFRS16, net debt at 31
December 2019 stood at GBP150.0m, representing 1.5 times EBITDA on
a pre IFRS16 basis. The Group has a GBP300m Revolving Credit
Facility, committed through to November 2023, and has taken
pre-emptive action in drawing down all but GBP15m of the unutilised
facility and holds it on deposit across several banks.
Commenting on this announcement, Martin Payne, Chief Executive
Officer, said "In these unprecedented times we have acted swiftly
and decisively, taking our decisions with the best interests of our
employees and customers foremost in our minds. The Board's thoughts
are with all of our employees and their families in what are
worrying times for us all. The Group's strong balance sheet and
cash generation, together with our talented people and clear
strategy gives the Board confidence that it will overcome whatever
challenges await."
Enquiries:
Polypipe
Martin Payne, Chief Executive
Officer
Paul James, Chief Financial
Officer +44 (0) 1709 770 000
Brunswick
Nina Coad
Dan Roberts
Sophia Lazarus +44 (0) 20 7404 5959
Notes to Editors:
Polypipe Group plc ("Polypipe", the "Company" or the "Group"), a
leading provider of sustainable water and climate management
solutions for the built environment is the largest manufacturer in
the UK, and among the ten largest manufacturers in Europe, of
plastic piping systems for the residential, commercial, civils and
infrastructure sectors by revenue. It is also a leading designer
and manufacturer of energy efficient ventilation systems in the
UK.
The Group operates from 19 facilities in total, and with over
20,000 product lines, manufactures the UK's widest range of plastic
piping systems for heating, plumbing, drainage and ventilation. The
Group primarily targets the UK and European building and
construction markets with a presence in Italy, the Netherlands,
Ireland and the Middle East and sales to specific niches in the
rest of the world.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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