RNS: Business Update - COVID-19
Monday, 23 March 2020
Synectics plc (AIM: SNX) provides the following update on the measures the Company is taking in response to the developing COVID-19 situation.
The Board is closely monitoring the effect Coronavirus (COVID-19) is having on Synectics’ customers, business and employees, and are making necessary decisions daily to meet the rapidly changing situation.
The business has a solid cash position, and has measures already in place to ensure it remains financially sound during this period of uncertainty, and beyond.
The Company’s business is to provide security and safety systems: Our employees and customers are acutely aware of the vital role they play in protecting communities around the world, and are making every effort to ensure our customers can rely on us at this difficult time.
Although we anticipate significant, unavoidable disruption, we are using best endeavours to continue essential service and support to our customers.
The priorities for the Board are to:
- protect the health and well-being of our employees and customers;
- provide ongoing support to our customers, especially where we are providing essential security and safety; and
- manage our business for the long term by prudent actions to preserve cash and maintain capability.
Changes to Working Practices
As an International business, we are closely following all National government regulations and guidance wherever we operate - regarding travel, working practices, 'stay home' notifications, healthcare, and well-being.
We have taken significant steps to protect colleagues and customers, while actioning robust continuity plans to minimise disruption – which we are constantly reviewing and updating.
We suspended all business travel at the start of last week, re-arranged working patterns at all Synectics sites, and implemented measures such as increasing remote support, and ensuring our teams can work from home.
Most employees are now working from home, or on rotation: with an expected significant and extended increase in homeworking, which many of our colleagues have no experience of, we have instigated a specific programme to keep colleagues connected to the business and each other, to facilitate continued teamwork and avoid feelings of isolation.
The business has a solid cash position. Currently available cash balance was £4.1M as of 20 March 2020, with confirmed facilities of £5M in place if required.
Measures have already been put in place to curb discretionary spending and to preserve cash. All recruitment and non-critical capital expenditures are on hold. Stocking plans are being adjusted daily based on customers’ committed requirements.
These actions should ensure that the business remains financially sound during this period of uncertainty and beyond.
We also note and welcome the UK Government’s “Coronavirus Job Retention Scheme” and we await further details on how this will operate.
The Company still expects to hold its Annual General Meeting (“AGM”) on 23 April 2020, but the venue for this has been changed to its offices in Sheffield and proceedings will be broadcast online.
The Board would encourage all shareholders who wish to do so to vote online at www.signalshares.com rather than attend the AGM in person.
In order to reduce the risk of infection, the meeting will end immediately following the business of the AGM.
Instructions on proxy voting are attached to the Notice of Meeting enclosed with the 2019 Annual Report which has already been sent out to shareholders and which can be found on the Company's website.
The Board has recommended the payment of a final dividend for the year ended 30 November 2019 of 3.5p per share, subject to approval by shareholders at the Company’s AGM on 23 April 2020.
Given the current situation and the desire to preserve cash, the Board believes it is appropriate and prudent to cancel the final dividend payment for the year ended 30 November 2019 and therefore intends to withdraw the relevant resolution at the AGM.
The Board will review the situation later in the year.
The priorities for the Board are as set out above. We are a global business with a solid balance sheet, and we have taken immediate measures to contain costs and protect our financial position.
Modest trading in Q1 was expected to be followed by a strong Q2 performance. However given the continued uncertainty, the Board wishes to withdraw financial guidance on expected trading performance for the financial year ending 30 November 2020.
The Board will continue to monitor the situation closely and provide a further update at the time of the AGM on 23 April 2020.
For further information, please contact:
Paul Webb, Chief Executive
David Bedford, Finance Director
Tel: +44 (0) 114 280 2828
Tom Griffiths / Henry Willcocks
Tel: +44 (0) 20 7408 4050