Restore plc (AIM: RST), the UK market leader in document management and business relocation, is pleased to provide the following trading update ahead of its AGM to be held later today.
HEALTH AND WELL-BEING
Restore continues to prioritise the health and well-being of staff and customers. Since the outbreak of COVID-19, management has acted quickly to adapt processes and business activity levels to ensure safe working practices.
The working procedure requirements as set out in the recent ‘COVID Secure’ guidelines, issued by the UK Government on 11 May 2020, had already been implemented throughout each of Restore’s business units, and we have continued to operate effectively under both the Government’s and Restore’s own stringent risk management policies throughout this period.
In the trading update issued on 21 April 2020, the Board confirmed that it would not be appropriate to provide specific guidance for the current financial year due to the uncertainty presented by the outbreak of COVID-19. However, the Company is in a position to provide an update on the key performance and demand trends experienced during April and May to date, which have been positive:
· Following a reduction through the second part of March, activity in April stabilised at levels which were better than expected at the start of the month
· All businesses are continuing to trade with most operational sites open
· Storage revenue streams in our largest business, Records Management, remain solid and reliable
· Swift actions to reduce variable and discretionary costs were implemented effectively
· After furloughing approximately 45% of the workforce we have started to bring back some employees in response to growing customer demand and we expect this to continue in the coming weeks and months
· The business remains strongly cash generative and in line with the Board’s expectations. The Group is operating well within its banking covenants and has significant headroom in its credit facilities
We have modelled different operating scenarios as per the trading update on 21 April 2020 and under both ‘short and severe’ and ‘long and severe’ scenarios, the Group will remain profitable with a robust financial position and strong liquidity for the year to 31 December 2020. The recent improved performance trends support the Board’s confidence in the strength of the Group’s liquidity position as well as its ability to remain profitable in 2020 albeit lower than reported for 2019.
The Group’s Half Year results will be released on 30 July 2020.
CHARLES BLIGH, CEO, COMMENTED
“The response from the whole team in adapting to this new environment has been exceptional and we are all especially proud to be supporting essential services including the NHS as they continue to fight the COVID-19 outbreak. We have seen customer demand stabilise and it is encouraging that we have already recalled a number of our employees from furlough. Swift action to maintain revenue and manage costs are proving successful and the Group continues to have strong liquidity.
“We expect to emerge from this period with a solid base from which we will be well positioned to bounce back strongly to deliver on our strategic plans and take advantage of opportunities as they arise.”