31 March 2020 -trading update
The company has provided a detailed update on trading for the year to 31 March 2020, the impact of the COVID-19 pandemic and the renewal of bank facilities. The company’s current expectation is that operating profit for the year to 31 March 2020, stated before amortisation and other adjustments will be in the range of £2.2m to £2.3m as reported, or approximately £2.3m to £2.4m if including a full year’s effect of the recent acquisition of Lister Holdings (York) Limited versus £3.2m as reported in the prior year. The existing £3.5m revolving credit facility with Yorkshire Bank, which was due for renewal in May 2020, has been renewed both ahead of schedule and on slightly better terms than those previously in place. This provides working capital facilities committed to May 2023. A £1m overdraft facility, which is renewable annually, is also in place. The company is facing uncertainties in the near term but feels that it is well positioned to ‘weather the storm’. We agree and keep our BUY rating.