TIDMSTAF
RNS Number : 2922R
Staffline Group PLC
29 June 2020
29 June 2020
STAFFLINE GROUP PLC
("Staffline", the "Company" or the "Group")
Completion of Refinancing
Staffline, the recruitment and training group, announces that it
has agreed a revised financing structure with its lenders.
As previously announced, the Board of Directors has been in
constructive discussions with the Group's lenders to amend and
partially refinance its financing facilities as well as its
covenants package to ensure that the Group is well positioned to
support its customers and implement its turnaround programme.
In order to assess the Group's request to amend its financing
facilities and covenants package, an independent business review
was commissioned by the lenders. Following completion of this
review and subsequent negotiations with the Group's lenders, the
new financing structure agreed with its lenders includes the
following:
Previous arrangement New arrangement
Revolving Credit facility GBP78.2m GBP30.0m
("RCF")
--------------------- ----------------
Overdraft GBP25.0m -
--------------------- ----------------
Receivables Finance Facility - GBP73.2m
("RFF") (invoice discounting)
- maximum
--------------------- ----------------
Total Facility GBP103.2m GBP103.2m
--------------------- ----------------
Expiry date 4 July 2022 4 July 2022
--------------------- ----------------
The key terms of the new facilities are set out below, with key
other terms of the RCF remaining in place:
i) Repayment and cancellation of RCF commitments by GBP10.0m on
31 July 2020, reducing the RCF to GBP20.0m;
ii) The RFF can initially be drawn down against the receivables
of the Recruitment GB division and the Northern Ireland part of the
Recruitment Ireland division;
iii) Interest on the RFF accruing at 3.50% plus Bank of England base rate;
iv) Minimum EBITDA and minimum liquidity covenants until a
return to leverage and interest cover covenants in January 2022.
The minimum EBITDA covenants have been calculated by reference to
the Group's downside case;
v) Restrictions on new material share, business and asset acquisitions until July 2022;
vi) No dividends to be declared by the Company until July 2022.
The Group is also funded through customer financing agreements
with some of its key customers and an uncommitted (non-recourse)
receivables financing facility with a facility limit of GBP25m.
The revised covenant package is more appropriate for the Group's
current trading levels.
Liquidity
As previously reported, the Government announced on 20 March
2020 that no VAT payments due from businesses between 20 March 2020
and the end of June 2020 would be required to be made and that
these would become payable on or before 31 March 2021. This payment
delay provides the Group with an immediate and significant
short-term liquidity improvement estimated to be approximately
GBP45.0m.
With the VAT deferral and the revised financing structure agreed
with its lenders, the Group is well placed to support its customers
and implement its turnaround programme.
Based upon a review of the Group's forecasts and associated cash
flows for the period ending 31 December 2021, the Group's liquidity
forecast (considering its available financing facilities) for this
period is sufficient to cover the Group's commitments during that
period save for with the exception of a portion of the deferred VAT
falling due on or before 31 March 2021. The Directors are working
on options to mitigate this liquidity risk, including the
implementation of a turnaround plan.
More detail on this liquidity position will be included in the
Company's preliminary results for the year ended 31 December 2019,
which the Company is now in the process of finalising.
Ian Lawson, Executive Chairman of Staffline, commented:
"We are pleased to have secured the refinancing of Staffline and
wish to thank our lenders for their ongoing support. The Group has
a solid liquidity position through to March 2021 and this
refinancing provides us with the platform to focus on our
turnaround plan which includes margin improvement measures, cost
reduction initiatives and working capital improvements."
This announcement is released by Staffline Group plc and
contains inside information for the purposes of the Market Abuse
Regulation (EU) 596/2014 ("MAR") and is disclosed in accordance
with the Company's obligations under Article 17 of MAR. The person
who arranged for the release of this announcement on behalf of
Staffline Group plc was Ian Lawson, Executive Chairman.
For further information, please contact:
Staffline Group plc via Vigo Communications
www.stafflinegroupplc.co.uk
Ian Lawson, Executive Chairman
Daniel Quint, Interim Chief Financial
Officer
Liberum NOMAD and Broker
www.liberum.com
Bidhi Bhoma / Joshua Hughes 020 3100 2222
Vigo Communications Financial PR 020 7390 0230
www.vigocomms.com staffline@vigocomms.com
Jeremy Garcia / Antonia Pollock / Charlie
Neish
About Staffline - Recruitment, Training and Support
Enabling the Future of Work(TM)
Staffline is the UK's market leading Recruitment and Training
group. It has three divisions:
Recruitment GB
Staffline is the UK's leading provider of flexible blue-collar
workers, supplying approximately 40,000 staff per day on average to
around 450 client sites, across a wide range of industries
including agriculture, drinks, driving, food processing, logistics
and manufacturing.
Recruitment Ireland
The recruitment Ireland business is a leading end to end
solutions provider operating across 20 industries, 10 branch
locations, 15 onsite customer locations and offering RPO, MSP,
temporary and permanent solutions across the island of Ireland.
.
PeoplePlus Division
Staffline is the leading adult skills and training provider in
the UK, delivering apprenticeships, adult education, prison
education and skills-based employability programmes across the
country.
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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