23 April 2020 – trading statement
The leading geotechnical specialist contractor has provided an update on trading in the first quarter as well as announcing the sale of its Brazil operations and a delay to the forthcoming Annual General Meeting. As announced on 25 March 2020, trading for January and February was marginally above expectations but activity fell away during the second half of March due to national and regional restrictions on travel and work. The March result was less impacted than expected though and the performance for the quarter as a whole was better than expectations, also materially better than the previous year. Trading in April remains mixed, with APAC and EMEA currently impacted more than North America. Once current national and regional restrictions on travel and work are lifted, the company expects to return to work on the majority of those contracts currently being affected. The order book in the near term remains largely unaffected. As at 31 December 2019 net debt was £213m and as at 31 March 2020, the group had undrawn committed and uncommitted borrowing facilities totalling £238m. The sale of Brazilian entity, Tecnogeo, will bring in £2.3m and result in a small non-underlying loss on disposal for the group. The dividend timetable has been revised with a new ex-dividend date of 30 July and payment date of 21 August. We now rate the shares as a HOLD.