DJ SThree: Update on Trading and COVID-19 and Annual General Meeting Guidance
SThree (STEM)
SThree: Update on Trading and COVID-19 and Annual General Meeting Guidance
06-Apr-2020 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
SThree plc
Update on Trading and COVID-19
and
Annual General Meeting Guidance
Given the rapidly-changing trading background arising from the global
COVID-19 pandemic, SThree ("SThree" or the "Group") is providing the
following update.
Business and Trading Update
As a Group, we have three overriding priorities: ensuring the health and
safety of all of our colleagues, contractors, candidates and clients;
maintaining our strong financial position and ensuring that we come out of
this period ready to build on our unique position as the only global
pure-play STEM specialist.
The COVID-19 pandemic is first and foremost a global health crisis, with
governments across the world taking unprecedented action to prevent the
further spread of the virus. The responses taken differ significantly by
region and the impact also varies markedly by sector. Clearly, our business
is not immune to the economic impact of the current situation. Whilst the
pandemic continues, it is not possible to estimate with any certainty the
extent of the impact on the Group. The Board therefore considers it is no
longer possible to provide guidance on future earnings. The Board will
continue to update shareholders as the situation evolves.
We are proactively managing our cost base in the short term. For the time
being we have ceased all hiring and are managing our headcount as is
appropriate to the varied local conditions we face. We have a particular
focus on working capital management and all non-essential capital
expenditure has been postponed, as have all discretionary costs. Salaries of
the executive directors of the Board and senior executive team, and the fees
of the non-executive directors, have been temporarily reduced by 20%, with
the executive directors also foregoing FY20 bonuses. Underpinning all our
management decisions is the clear objective to balance the need to secure
the short-term financial strength of the Group, whilst retaining the skills,
capacity and management capability to fulfil our undimmed strategic
ambitions.
Maintaining the full operational capability of the group is in keen focus.
On 28 February, we set up a dedicated COVID-19 crisis team made up of key
senior managers from across the business, which is monitoring operations and
reacting as appropriate. The committee convenes daily to make sure all
possible actions to help mitigate the impact are taken quickly and
effectively, whilst ensuring that the Group will be in a strong position to
continue executing on its growth strategy once conditions begin to
normalise.
We have adjusted our operations to protect the health and safety of our
colleagues, contractors, candidates and clients and within a matter of weeks
have moved over 98% of our Group headcount to remote working. We recognise
that many of the communities we operate in are facing serious challenges and
therefore, in line with the Group's purpose-driven culture, have made the
decision to extend the paid volunteering leave we offer for those supporting
the areas of our community most impacted by COVID-19. We are encouraging all
our staff to make use of this time to safely volunteer.
Financial position
SThree is in a strong financial position with total accessible liquidity of
GBP57.4m as at 31 March 2020. This is made up of GBP2.4m net cash, a GBP50m
revolving credit facility ("RCF"), which has now been fully drawn down, and
a GBP5.0m overdraft. In addition, SThree has a GBP20m accordion, and a
substantial working capital position (GBP98m as at 30 November 2019),
reflecting net cash due to SThree for placements already undertaken.
Covenants on the RCF are limited to a net debt to EBITDA ratio of 3:1 and a
minimum of 4:1 on EBITDA to interest. The Board acknowledges that the
conservation of funds is critical at this time of intensified uncertainty
and has therefore taken steps to further strengthen its financial position.
SThree welcomes the Government support being shown for businesses globally,
including the deferring of various tax payments. The Group is also at an
advanced stage in seeking access to the Bank of England's Covid Corporate
Financing Facility (CCFF). In addition, SThree is actively exploring other
opportunities to access support across all its regions of operation.
In order to further protect the balance sheet, the Board has also taken the
difficult decision not to propose the 2019 final dividend of 10.2 pence per
share, detailed in the Final Results and Notice of AGM. A resolution was due
to be proposed at the forthcoming Annual General Meeting ("AGM") on 20 April
2020, but this resolution will now be withdrawn. This will conserve a
further GBP13.5 million. The Board recognises the importance of dividends to
our shareholders and will keep future dividend payments under review.
Updated AGM Guidance
As required by its articles of association, the Group currently intends to
proceed with its Annual General Meeting ("AGM") as planned at 11.30am on
Monday 20 April, at 75 King William Street London EC4N 7BE. Currently, a
quorum of two shareholders is required to attend in person, to be satisfied
by the Chair and another Director or the Company Secretary, although should
the Government relax this requirement, or other measures be necessary,
alternative arrangements will be considered.
The health of the Company's shareholders and its colleagues is of paramount
importance. Due to the COVID-19 crisis, shareholders are required to follow
the latest Government guidance in respect of public gatherings and therefore
are instructed that they should not attend the AGM in person but instead
submit their votes by proxy, with all votes to be routinely dealt with by
way of a poll. Further details can be found in the notification on the
Group's website: https://www.sthree.com/en/investors [1]. As set out in the
Notice of AGM, shareholders can also ask questions in advance of the meeting
by emailing cosec@sthree.com, with responses to be set out with the
notification of AGM result, if appropriate.
As in prior years, arrangements will also be made for the Chair and/or other
Directors, to meet with shareholders to discuss governance or other relevant
topics, later in the year, once the current situation stabilises.
Mark Dorman, CEO of SThree, said:
"The coming months will not be easy and in the short term we are focused on
safeguarding the health of our stakeholders and taking decisive action to
protect the strength of our Group both now and in the future.
"However severe the current disruption proves to be, the demand for STEM
skills and the trend to flexible working will accelerate as a result of the
changes we are seeing in social behaviour, travel and working patterns. We
are focused on capturing growth in the medium to long term brought about by
these increasingly important secular trends.
"As a strong business with the right strategy, a diversified footprint and a
sound platform for growth in place, we are confident we can weather this
crisis and will emerge well positioned to continue on our growth
trajectory."
- Ends -
Enquiries:
SThree plc 020 7268 6000
Mark Dorman, Chief Executive Officer
Alex Smith, Chief Financial Officer
Steve Hornbuckle, Company Secretary
Alma PR 020 3405 0205
Rebecca Sanders-Hewett SThree@almapr.co.uk
Susie Hudson
This announcement contains inside information for the purposes of Article 7
of the Market Abuse Regulation (EU) 596/2014.
Notes to editors
SThree is a leading international STEM specialist staffing business,
providing permanent and contract specialist staff to a diverse client base
of over 9,000 clients.
The Group's operations cover the Technology, Banking & Finance, Energy,
Engineering and Life Sciences sectors. With a multi-brand strategy, the
Group establishes new operations to address growth opportunities. SThree
brands include Computer Futures, Huxley Associates, Progressive and The Real
Staffing Group. The Group has a network of 47 offices in 16 countries, of
which 41 are in our international(2) markets, with circa 3,100 employees.
SThree plc is quoted on the Official List of the UK Listing Authority under
the ticker symbol STEM and also has a US level one ADR facility, symbol
SERTY.
Important notice
Certain statements in this announcement are forward looking statements. By
their nature, forward looking statements involve a number of risks,
uncertainties or assumptions that could cause actual results or events to
differ materially from those expressed or implied by those statements.
Forward looking statements regarding past trends or activities should not be
taken as representation that such trends or activities will continue in the
future. Certain data from the announcement is sourced from unaudited
(MORE TO FOLLOW) Dow Jones Newswires
April 06, 2020 02:00 ET (06:00 GMT)
internal management information and is before any exceptional items.
Accordingly, undue reliance should not be placed on forward looking
statements.
ISIN: GB00B0KM9T71
Category Code: MSCH
TIDM: STEM
LEI Code: 2138003NEBX5VRP3EX50
Sequence No.: 56651
EQS News ID: 1015699
End of Announcement EQS News Service
1: https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=496d853db63e665b719bf45a828eef1a&application_id=1015699&site_id=vwd&application_name=news
(END) Dow Jones Newswires
April 06, 2020 02:00 ET (06:00 GMT)
© 2020 Dow Jones News
