Tex Holdings PLC Chairman's Statement (2008U)
27 July 2020 - 10:42PM
UK Regulatory
TIDMTXH
RNS Number : 2008U
Tex Holdings PLC
27 July 2020
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014 ("MAR"). Upon the publication
of this announcement via a regulatory information service, this
information is now considered to be in the public domain.
TEX HOLDINGS PLC
CHAIRMAN'S STATEMENT - 27(th) July 2020
I will now provide you a brief report of the trading
companies.
The business overall has been adversely impacted by the COVID-19
situation. As such, the board and senior management team have taken
swift and timely action to mitigate the impact caused by the
pandemic. The business has made use of the Government furlough
scheme and has managed costs tightly in all areas. It is expected
that the results of these measures will provide a solid base for
recovery and growth in 2021 although cashflow continues to be
critical.
The Plastics Division is trading at approximately 70% of
expected levels which is thanks to the increase in business from
the medical and hygiene sectors compensating for the slowdown in
other orders. With lockdown restrictions easing, business has
started showing signs of recovery. The cost control initiatives
previously announced have been implemented.
Tex Engineering is having a difficult year and a root &
branch review is being made of the cost and pricing structures to
provide a more efficient, lean and profitable operation. The orders
are improving with June intake recovering to pre COVID-19 levels,
with certain capital plant sales secured. The prospect of future
investment in major infrastructure projects gives grounds for
cautious optimism.
Eurotex trading during the first half of the year has been
better than budgeted levels with orders being received from a
number of sovereign navies. Work continues on the River class
vessels and the maintenance periods scheduled during lockdown are
now confirmed for the second half of the year.
The A.T.C. division continues to progress current contracts to
supply major international customers with seven Visual Control
Rooms which are in the final stages of completing the structural
calculations and design. Upon receipt of site-specific information
and client design approval, manufacturing will commence. Contracts
are ongoing in support of the Queen Elizabeth Class aircraft
carriers. The division is also working on a number of additional
tenders to supply specialist glass and Visual Control Rooms.
BSP started 2020 with a strong order book and continued to gain
good traction with order intake in Q1, which has resulted in us
completing the first half of the year slightly ahead of budgeted
sales despite the challenges of the pandemic. Cash collection has
been strong throughout the period and the second half of the year
is expected to be in line with budgeted levels.
G&M TEX has experienced a slowdown in orders, however the
orders for generators on six crab fishing vessels are expected to
be placed in Q3. The project for Colchester NHS Trust, whilst
delayed, is now expected to complete testing in July with
installation in August. Generally, the experience has been that
orders will still materialise but at a slower rate than
pre-pandemic expectations.
QK Honeycomb Products has been the one group company hardest hit
by COVID-19. During the 1st quarter of the year trading was at
above budgeted levels. However, due to COVID-19, the majority of
QK's regular customers suspended production, resulting in a
significant drop in demand during the 2nd quarter. The easing of
government lockdown restrictions has seen a gradual return of some
customers, although normal operations are not anticipated to resume
until late August, after the annual summer shutdown period. The
main customer base - the 'leisure vehicle manufacturers' - are
reporting positive news from their dealers, advising a surge of
interest from new and existing customers as people consider the
'staycation' holiday.
As a Group, 2020 is no longer a year of planned growth, but a
year to review and consolidate the businesses, minimise costs
wherever possible and putting measures in place to use COVID-19 as
a catalyst for change. This will build a far more lean and agile
business for when the recovery eventually materialises. In light of
the current uncertainties around COVID-19, the global economy and
Brexit, the board has decided it needs additional working capital
and has approached the major shareholder for further funding.
G.C. Gray
Chairman
27(th) July 2020
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END
MSCBDGDRSXDDGGR
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