Quixant (AIM: QXT), a leading provider of innovative, highly engineered technology products principally for the global gaming and broadcast industries, is pleased to provide an update on the business in light of the current global disruption caused by COVID-19.
COVID-19 trading update
During this period of disruption to our business, the health and wellbeing of our staff is our highest priority, and we are pleased to report that our staff members continue to operate normally having transitioned smoothly to remote working wherever appropriate.
As previously stated, the global gaming industry remains largely closed down and consequentially demand for Quixant’s gaming products has been impacted and receivables collection has been slower than normal. Positive signs of recovery are starting to show and from week commencing 11th May, we started to see the first reopening of venues in the US and robust attendance from players.
The Densitron business is performing well with healthy demand for its products in a range of sectors and coupled with robust gross margins. In keeping with this performance, Densitron has not experienced any material reduction in customer payments.
The Board believes that once we start to see the gradual reopening of more of the economy, multiple opportunities across the Gaming and Densitron businesses to deliver long term growth will present themselves and we are ensuring that the business is in an ideal position to take advantage of these opportunities when they arise.
Working capital position
The Company’s balance sheet remains strong with net cash at end April 2020 of $14.8m ($16.1m as at 31 December 2019). In addition, the Board has access to as yet unutilised lines of credit totalling $3.0m. In addition, we are investigating whether it may be possible to access other COVID-19 related Government backed loan schemes.
The Board has taken measures to reduce the Company’s overhead base by around 10% compared to the 2020 budget and Board members have taken a minimum of a 25% reduction in salary. We are continuing to review our cost base.
The Board is confident that, with the Company’s cash reserves and borrowing facilities, it has sufficient working capital to support a prolonged slowdown in the business should the need arise, and that the Group’s balance sheet is sufficiently resilient to withstand the current crisis.