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Eurocell Updates On COVID-19 Impact; Plans Phased Reopening

Eurocell Sheffield 725 x 500.jpg

Eurocell, the market leading, vertically integrated UK manufacturer, recycler and distributor of innovative window, door and roofline PVC products, provides the following COVID-19 update ahead of its Annual General Meeting to be held at 3pm today.

Initial Actions in Response to COVID-19
As previously announced, performance in the 11 weeks to 20 March 2020 was in line with our expectations and there was no discernible impact on trading from COVID-19. Since then, our manufacturing plants, branch network, distribution and recycling operations have all been closed, in line with the official guidance from the UK Government.

Alongside the closure of our operations, we also took a number of significant, swift actions to conserve cash. These included the deferral of non-essential operating costs and the vast majority of planned capital expenditure whilst operations remained closed, and cancellation of the final dividend payment for the year ended 31 December 2019. Also as part of these actions, the Board and other members of the senior management team agreed to a 20% reduction in remuneration. In addition, we have continued to make use of various Government measures available, including the Coronavirus Job Retention Scheme.

Bank Facility and Share Placing
We have a strong balance sheet and were able to increase our bank facility to £75 million in March 2020. As previously disclosed, we continue to believe our banks will be supportive of reviewing covenants, if required.

Given the ongoing uncertainty of the COVID-19 situation, on 1 April we raised approximately £17.6m by way of a share placing. Net proceeds will be used to ensure we retain headroom on our bank facility, even under an extended shut-down, and to provide sufficient liquidity for investment in our new state-of-the-art warehouse. As well as being key to increasing total capacity, the new warehouse will deliver improved operational efficiencies. Good headroom on our bank facility will ensure the business is well placed to capitalise on opportunities when markets re-open.

Re-opening Plans
We are now pleased to announce that, following the latest guidance from the Government, which permits tradesmen to work in domestic dwellings so long as appropriate precautions are taken, we have implemented the first steps towards re-opening the business. On 11 May we recommenced supply to our fabricator customers from existing stocks and opened six branches around the country. This is allowing us to test our safe-working practices and begin to assess the level of customer demand. We are encouraged that trading over the first three days has been robust, although it is not yet clear whether this is a result of pent up or underlying demand. Subject to the on-going results from these activities, and in particular there being sufficient underlying demand, we plan a phased re-opening of the business over the coming weeks. This includes a return to manufacturing when required to ensure continuity of supply to customers.

In the meantime, fit-out of the new warehouse remains on track and we continue to target being operational early in 2021, although this date may still be affected by COVID-19 developments. 

We will provide a further update when there is more clarity on the impact of COVID-19 on the Group.

Annual General Meeting
The 2020 Annual General Meeting will be held at 3pm today at Fairbrook House, Clover Nook Road, Alfreton, Derbyshire, DE55 4RF. As previously announced, and in line with Government guidance in relation to COVID-19, shareholders, proxies and other attendees will not be permitted to attend the AGM in person and shareholders have been strongly advised to vote by proxy. A facility to ask the directors questions by email was made available. Answers will be published, in due course, on the Company’s website: www.eurocell.co.uk.

Source : Eurocell

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14 May 2020

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