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No 2020 dividend at RTC as it cuts cost base
28th Apr 2020 15:12
(Sharecast News) - RTC Group updated the market on the impact of the Covid-19 coronavirus pandemic on its business on Tuesday, as well as the measures it was taking to mitigate the associated risks.
The AIM-traded firm confirmed it had made operational changes, with the majority of its staff working from home, and those who were unable to do so "strictly adhering" to the social distancing measures advised by the government.
It said the majority of its activities are in public and regulated sectors, being infrastructure and railway transportation, and providing contract workers vital to the country.
"The indications are that this will continue," the board said in its statement, adding that its activities internationally were largely unaffected.
"However, general UK recruitment and smart-meter installation activities have been significantly impacted by the lockdown."
Its directors said they believed the group had a strong balance sheet, adding that the company was taking additional measures to protect that by reducing its cost base, deferring non-essential capital expenditure, and reducing debt.
"The group is making use of the government's Coronavirus Job Retention Scheme by furloughing affected employees and utilising the government's VAT deferral scheme.
"In addition, no dividend payment is proposed for 2020 and the board and senior management have all agreed to a temporary 20% reduction in their salaries."
Trading in the first quarter had been largely unaffected by the current situation, the board added, although the scale and duration of disruption to future activities was not yet clear.
"Whilst rail and infrastructure activities provide comfort for the future it is too early to quantify the impact of Covid-19 on revenues and operational profits for the full calendar year 2020.
"A further update will be given at our annual general meeting in June."
At 1228 BST, shares in RTC Group were up 10.59% at 47p.
The AIM-traded firm confirmed it had made operational changes, with the majority of its staff working from home, and those who were unable to do so "strictly adhering" to the social distancing measures advised by the government.
It said the majority of its activities are in public and regulated sectors, being infrastructure and railway transportation, and providing contract workers vital to the country.
"The indications are that this will continue," the board said in its statement, adding that its activities internationally were largely unaffected.
"However, general UK recruitment and smart-meter installation activities have been significantly impacted by the lockdown."
Its directors said they believed the group had a strong balance sheet, adding that the company was taking additional measures to protect that by reducing its cost base, deferring non-essential capital expenditure, and reducing debt.
"The group is making use of the government's Coronavirus Job Retention Scheme by furloughing affected employees and utilising the government's VAT deferral scheme.
"In addition, no dividend payment is proposed for 2020 and the board and senior management have all agreed to a temporary 20% reduction in their salaries."
Trading in the first quarter had been largely unaffected by the current situation, the board added, although the scale and duration of disruption to future activities was not yet clear.
"Whilst rail and infrastructure activities provide comfort for the future it is too early to quantify the impact of Covid-19 on revenues and operational profits for the full calendar year 2020.
"A further update will be given at our annual general meeting in June."
At 1228 BST, shares in RTC Group were up 10.59% at 47p.