TIDMRCH
RNS Number : 8194I
Reach PLC
06 April 2020
Monday 6 April
Reach PLC
('Reach' or 'the Company')
COVID-19 Update on Key Mitigating Actions
INTRODUCTION
On 26 March Reach PLC announced a number of key actions to
safeguard the health and wellbeing of our colleagues, while
continuing to serve customers by maintaining all business
operations during the current COVID-19 crisis. These actions have
been executed swiftly and efficiently and all our print and digital
publications continue to be produced without interruption,
delivering high quality editorial content at this crucial time.
There continues to be uncertainty around the severity and length
of the crisis and the resulting impact on Reach in terms of
advertising, print circulation and events. As a result Reach has
suspended guidance for the financial year 2020 and beyond. However,
we have taken a number of cash conservation measures including
removal of discretionary spend, appropriate renegotiations with
suppliers, cancellations of orders and negotiated payment
delays.
Further to this we are today announcing a number of new cost
mitigation measures. All of these actions will be subject to
ongoing review in the light of the crisis and its continued impacts
or any improvement in the current environment.
KEY ACTIONS TO MITIGATE COSTS AND CONSERVE CASH
All members of the PLC Board, along with some members of our
most senior editorial and management team, will take a pay
reduction of 20% effective immediately. All company bonus schemes
for 2020 have been suspended and the Board retains its discretion
over the Long Term Incentive Plan. We will also be communicating
today with Reach employees regarding a 10% pay reduction (while
ensuring no employee falls below Living Wage) and for 20% of Reach
colleagues to be furloughed under the Government's Coronavirus Job
Protection Scheme in the UK. We will also register for the
Temporary Wage Subsidy Scheme in Ireland.
The Board has agreed that all stakeholder groups should be asked
to contribute to ensuring the company is in as strong a position as
it can be and as a result the company has requested discussions
around a deferment of current contributions to all the group
pension funds.
DIVIDEND
After due consideration, the Board has decided it will no longer
propose a final dividend for the financial year ending 2019. While
the Board recognises the importance of dividends to shareholders,
given the uncertainty around the current crisis and the fact that
the company is accessing the Government's Job Protection scheme it
has been decided that it would be inappropriate to pay a dividend
at this time. Any future decisions regarding the interim dividend
for the financial year ending 2020 will be taken at the appropriate
time in the light of the duration and impact of the current
crisis.
BALANCE SHEET AND LIQUIDITY
As noted in our recent update, the business came into the year
with a robust balance sheet position and confirms that it continues
to have adequate liquidity. As a result of strong cash generation
in 2019, the prior year net debt balance had become net cash of
GBP20.4m and new 4-year revolving banking facilities of GBP65m are
in place (with a 1.75x EBITDA covenant). The business has a proven
track record for disciplined cost control and strong cash
management, which will continue to be vital in the current
uncertain trading environment.
UPCOMING AGM
Our AGM is scheduled for 7 May and a further announcement will
be made in due course to detail arrangements.
IMPACT ON BUSINESS OPERATIONS
The Board believes these measures represent the most appropriate
and responsible course of action in the light of the ongoing
uncertainty around the length and impact of the current
unprecedented crisis. All of our key national and regional
publications will continue to operate at this vital time despite
these measures and we have sought to spread the burden of these
actions across all stakeholder groups. We continue to monitor the
impact of this crisis on the Group, recognising that the situation
is fast evolving.
Commenting on today's announcement Jim Mullen, CEO of Reach PLC
said: "These are very challenging times and I would like to thank
all our colleagues at Reach for their support and commitment. It
remains difficult to predict the duration and long term impact of
the crisis on our sector so it is key we take proactive measures
now on cost to protect jobs and the Reach business for the long
term."
--End--
Reach PLC
Jim Mullen, Chief Executive Officer communications@reachplc.com
Simon Fuller, Chief Financial Officer
Ciaran O'Brien, Director of Communications
Tulchan Communications 020 7353 4200
David Allchurch/Giles Kernick reachplc@tulchangroup.com
About Reach plc
Reach plc is the largest commercial national and regional news
publisher in the UK, with over 150 national and regional
multichannel brands including the Mirror, Express, Star, OK!, New!,
Daily Record, Manchester Evening News, Liverpool Echo, WalesOnline,
MyLondon and BelfastLive.
In December 2019, Reach sold 40m newspapers and reached a
digital audience of over 40m people in the UK. For more information
visit: www.reachplc.com .
Forward-looking statements
You are not to construe the content of this announcement as
investment, legal or tax advice and you should make your own
evaluation of the Company and the market. If you are in any doubt
about the contents of this announcement or the action you should
take, you should consult a person authorised under the Financial
Services and Markets Act 2000 (as amended) (or if you are a person
outside the UK, otherwise duly qualified in your jurisdiction).
This announcement has been prepared in relation to the financial
results for the five months ended 24 November 2019 and trading in
the period 1 July to 29 November 2019. The financial information
referenced in this announcement is not audited and does not contain
sufficient detail to allow a full understanding of the results of
the Group. Nothing in this announcement should be construed as
either an offer or invitation to sell or any offering of securities
or any invitation or inducement to any person to underwrite,
subscribe for or otherwise acquire securities in any company within
the Group or an invitation or inducement to engage in investment
activity under section 21 of the Financial Services and Markets Act
2000 (as amended). Certain information contained in this
announcement may constitute "forward-looking statements", which can
be identified by the use of terms such as "may", "will", "would",
"could", "should", "expect", "anticipate", "project", "estimate",
"intend", "continue", "target", "plan", "goal", "aim" or "believe"
(or the negatives thereof) or other variations thereon or
comparable terminology. These forward-looking statements include
all matters that are not historical facts and include statements
regarding the Company's intentions, beliefs or current expectations
concerning, among other things, the Company's results of
operations, financial condition, changes in global or regional
trade conditions, changes in tax rates, liquidity, prospects,
growth and strategies. By their nature, forward-looking statements
involve risks, assumptions and uncertainties that could cause
actual events or results or actual performance of the Company to
differ materially from those reflected or contemplated in such
forward-looking statements. No representation or warranty is made
as to the achievement or reasonableness of and no reliance should
be placed on such forward-looking statements. The Company does not
undertake any obligation to update or revise any forward-looking
statement to reflect any change in circumstances or in the
Company's expectations.
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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