Hargreaves Services PLC Deferral of Interim Dividend and Trading Update (6328H)

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RNS Number : 6328H

Hargreaves Services PLC

26 March 2020

Hargreaves Services plc

("Hargreaves" or the "Group")

Deferral of Interim Dividend and Trading Update

Hargreaves Services plc (AIM: HSP), a diversified group delivering services to the industrial and property sectors, is providing a trading update and notice of the suspension of the proposed interim dividend in the light of the Covid-19 pandemic.

Since the announcement of the Group's interim results on 29 January 2020, trading has been in line with our expectations, with no meaningful impact to date on the Group's trading activities as a result of Covid-19. Nevertheless, the Board has considered Government guidance in respect of Covid-19 and has determined that it is not possible to assess the potential impact on the Group's trading performance over any clear timeline. Against this background, the Board considers it prudent to protect the Group's cash position and management is focused on taking whatever steps it can to minimise all discretionary expenditure, including capital expenditure, and to reduce all other cash outflows wherever possible. In doing so, the Board is seeking to maintain the Group's trading activity and its level of service to its customers to the maximum extent possible.

Accordingly, the Board has decided to defer payment of the proposed interim dividend of 2.7 pence per share, otherwise payable on 6 April 2020, until further notice and will review the Group's future dividend policy once there is greater clarity on the likely future impact of the pandemic on the Group's business.

Regarding market consensus estimates for the Group's future financial performance, the Board considers that the uncertainties surrounding many industries as a result of Covid-19 render it impossible to provide any meaningful guidance.

As previously stated, the Group's current bank borrowing facilities of GBP50m are due to expire on 31 August 2020. Discussions are continuing with both existing and prospective new lenders to put in place appropriate facilities for the future. The Group has met all banking covenants and has no more measurement points prior to 31 August 2020. As reported at 30 November 2019, the Group had a strong balance sheet with net assets of GBP130m and net bank debt of GBP25.4m.

Roger McDowell, Chairman said: "The Board's first priority will always be the health and welfare of our employees and those with whom the Group engages, and robust procedures are in place to deliver that . Alongside those measures, the Board is taking all practical steps to safeguard the financial position of the Group in the face of this unprecedented and unpredictable global phenomenon. In doing so, our challenge is to anticipate the possible condition of the Group's various markets after the Covid-19 crisis and to shape our future strategy and business plans accordingly."

For further details:

 
 Hargreaves Services plc 
  Gordon Banham, Chief Executive 
  Officer 
  John Samuel, Group Finance Director     0191 373 4485 
 Buchanan (Financial PR) 
  Mark Court/Henry Wilson                 0207 466 5000 
 N+1 Singer (Nomad and Joint Corporate 
  Broker) 
  Sandy Fraser/Justin McKeegan/Rachel 
  Hayes                                   0207 496 3000 
 Investec (Joint Corporate Broker) 
  Sara Hale/Cassie Herlihy                0207 597 5970 
 

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March 26, 2020 03:00 ET (07:00 GMT)