RPS, a leading multi-sector global professional services firm, announces an update today on the impact of the rapidly evolving COVID-19 pandemic on its business alongside measures the Group is taking to actively manage and mitigate the risks to its employees, clients and operations.
Employees and clients
In order to ensure business continuity in its day-to-day operations, the Group has implemented a series of actions globally to protect the health and safety of its employees following the advice from the local authorities and governments in the jurisdictions in which the Group operates. These are monitored and reviewed daily and include: regular dialogue with employees and clients; the enforcement of office health and hygiene practices which follow specific health protection protocols; the adoption of flexible working arrangements; and restrictions on travel and meetings.
In the first two months of the current financial year there was no material COVID-19 impact on RPS' trading. Net bank debt as at 28 February was £109.7 million (1 March 2019: £91.3 million, 31 December 2019 £94.1 million). The increase in net bank debt since the year end (31 December 2019) arises mainly from a working capital outflow which follows the normal pattern for this time of the year. The headroom in respect of committed bank facilities as at the end of February 2020 was £33.0 million.
Although a certain amount of client work can be performed off-site, it is inevitable that COVID-19 will adversely affect our business. As the situation evolves, we will continue to update the market. To manage the anticipated volatility arising from COVID-19 the Board has made several decisions to reduce costs and contain cash outflow including the following:
- Cancellation of the proposed final dividend of 2.00 pence per ordinary share which was announced on 19 February 2020 and would have been payable on 15 May 2020, totalling £4.5 million.
- Suspension of all planned work on the further implementation of the Group's new ERP system, which was due to be rolled out in the remainder of Australia later this year, and in UK and Ireland in early 2021. This cessation of works will have a cash flow saving of approximately £5.0 million in FY 2020.
- Deferral of all 2020 salary increases and 2019 senior leadership bonus payments.
- Cessation of all non-essential capex and discretionary operating expenditure.
John Douglas, Chief Executive Officer, said:
"The health and safety of our employees and customers around the world remains our top priority and we are committed to working closely with local authorities and governments to limit the spread of the virus.
Given that significant uncertainty exists around the impact of COVID-19, we have decided to take immediate and significant measures to contain our costs and protect our financial position and this includes the cancellation of the final dividend for 2019. Whilst we fully understand the importance of dividends for shareholders, we consider this decision to be in the best interest of RPS, its people and shareholders.
We are adept at managing volatility, have good operating cash flows, a healthy mix of private and public sector clients and a strong, experienced senior management team. The Board is confident in RPS' ability to weather this unprecedented challenge and remains confident in our longer term strategy."
24 March 2020
For further information:
|RPS Group plc|
|John Douglas, Chief Executive||Tel: +44 (0) 1235 863 206|
|Gary Young, Finance Director||www.rpsgroup.com|
|Henry Harrison-Topham / Chris Lane / Tilly Abraham||Tel: +44 (0) 20 7466 5000|
Notes to Editors
Founded in 1970, RPS is a leading global professional services firm of 5,000 consultants and service providers. Having operated in 125 countries across six continents RPS defines, designs and manages projects that create shared value for a complex, urbanising and resource scarce world.
RPS delivers a broad range of services in six sectors: property, energy, transport, water, defence and government services and resources. Services provided across RPS' six sectors cover twelve service clusters: project and programme management, design and development, water services, environment, advisory and management consulting, exploration and development, planning and approvals, health, safety and risk, oceans and coastal, laboratories, training and communications, creative & digital services.
RPS stands out for its clients by using its deep expertise to solve problems that matter, making them easy to understand. Making complex easy.
RPS' London Stock Exchange ticker is RPS.L. For further information, please visit www.rpsgroup.com.