Walker Greenbank PLC (AIM: WGB), the luxury interior furnishings group, announces the following update in light of the Covid-19 pandemic, including the measures the Company is taking to protect its employees and mitigate risks to its business.
The safety of our employees is paramount. All of the Company’s employees who can work from home are doing so, including customer support teams, and we have taken the decision to temporarily close our two factories in the UK, the Anstey wallpaper factory and the Standfast & Barracks fabric printing factory. Our showrooms in Chelsea Harbour, New York and Paris are also temporarily closed. We intend to continue to supply our customers from our warehouses in the UK and US, which currently remain operational, including supporting customers utilising online distribution capabilities.
Trading in the current financial year started well and was in line with the Board’s expectations but Covid-19, and government measures in our key markets to prevent the spread of the virus, is now impacting our trading outlook. It is difficult for us to quantify the likely impact of Covid-19 at this stage. The Company is, therefore, withdrawing financial guidance until visibility on the impact of Covid-19 improves.
Owing to the uncertainty caused by Covid-19, we have been focusing on contingency planning and cost reduction to preserve cash in the business.
The launch of all Spring collections has been postponed, which will have the effect of reducing marketing and associated costs, and the procurement of raw materials for the factories and finished goods has been temporarily frozen, as has discretionary spend and capital expenditure. We are continuing to identify further cost mitigation measures.
It is intended to make use of the UK Government’s Coronavirus Job Retention Scheme, both for those employees affected by the temporary closure of the factories and others who are unable to work from home.
The Group had net cash as at 31 January 2020 of approximately £1 million, although this has now moved to a seasonal net debt position. The Group has headroom in its £12.5 million banking facility, an uncommitted £5 million accordion facility and discussions with its bank have been supportive. To further preserve cash, the Board does not intend to propose payment of a final dividend for the year ended 31 January 2020.
We will continue to update the market as the impact of Covid-19 on our business becomes clearer.