21 April 2020 – trading update

Prior to the Covid-19 lockdown performance in the first quarter was in line with expectations.  However, the situation became worse in the last few weeks of the period and this continued into the start of the second quarter.  Many of the company’s suppliers and customers suspended operations, although some have either already reopened or are planning to reopen in May, generally with reduced capacity.  it is believed that the group has traded in line with the sector during the period but this is difficult to determine.  Net debt at 31 March 2020 was £15.6m, a £1m reduction from the position at 31 December 2019 and within aggregate banking facilities of £25m.  Net cash flow is still due to be broadly as was anticipated.  Four warehousing facilities are currently being closed in the UK, the annualised savings from which are estimated to be £1.6m.  The cash cost of this restructuring is estimated at £1.8m, of which £0.5m was incurred in 2019.  A significant part of sales depend on the manufacturing and construction sectors so the company will be following developments closely and adjusting plans accordingly.  We keep our BUY rating.