TClarke PLC AGM and Trading Update (1363O)

TIDMCTO

RNS Number : 1363O

TClarke PLC

28 May 2020

TClarke plc (the "Company")

Annual General Meeting and Trading Update

TClarke plc, the Building Services Group, today announces the date for its Annual General Meeting ("AGM") and issues a Trading Update covering the period from 1st January 2020 to date.

Annual General Meeting

The postponed 108(th) AGM of TClarke plc will now be held on Wednesday 24(th) June 2020 at 10.00am. In response to the limitations on gatherings of people and restrictions on travel due to the Government's Stay at Home Measures, the AGM will now take place as a closed meeting attended by Company Directors to meet the quorum requirements. The meeting will now be held at the Group's Head Office at 45 Moorfields, London EC2Y 9AE. It will not be possible for shareholders to attend the meeting in person.Shareholders are strongly encouraged to vote online prior to the AGM.

Final Dividend

The Board has kept under review its proposed final dividend for 2019 and is now pleased to recommend the full payment of 3.65p per share as indicated previously. In arriving at its recommendation, the Board has taken into account the interests of all the stakeholders in the business and is mindful of the trading update referred to below. The Board proposes to pay this dividend on the 17(th) July 2020, subject to the approval of shareholders at the AGM. The shares will go ex-dividend on 18(th) June 2020 with a record date of 19(th) June 2020.

2020 Trading Update

As announced in the final results, TClarke successfully achieved its underlying operating profit target of 3% in 2019. The Company's profitability remained strong in the first quarter of 2020 with the Group maintaining the underlying operating margin of 3% on a turnover of GBP70m. As a result of COVID-19 many of our project sites have been closed with turnover for April falling to GBP10m. In spite of the fall in turnover, underlying operating profit (EBIT) is forecast to break even for Q2. Underlying operating profit for the first 6 months of 2020 is therefore expected to be circa GBP2m.

As part of its response to COVID-19 and to ensure the Company remains one of the most financially resilient and sustainable businesses within our sector, TClarke has undertaken a swift restructuring programme. The programme is expected to deliver savings of GBP4m per annum, of which approximately GBP2.4m is expected to be recognised during the current year.

The restructuring programme has so far resulted in one off costs of GBP3m which will be included in non underlying items in the half year accounts.

TClarke retains and remains fully committed to a directly employed workforce which is the cornerstone of the Group's offering. Most, if not all of our sites are expected to operational by the end of June.

The Group's COVID-19 Response Committee supported by its Health and Safety teams have planned and implemented a complete overhaul of our offices and projects to allow a safe, phased return to work to maximise productivity whilst adhering to the current Government guidelines.

TClarke started the year with a forward order book of GBP403M; it currently stands at GBP408m. The order book for the remainder of 2020 remains robust. As well as work secured, we are currently tendering many opportunities for 2020 and beyond.

Cash and Banking Facilities

The Company has a strong balance sheet and significant liquidity headroom. Through its strict controls the business remains financially robust and has maintained a positive net cash position throughout April and May. In addition, the Company remains committed to the supply chain and is maintaining regular payments to our suppliers to ensure that their cash flow is supported.

At this important time TClarke has renewed and extended its bank facilities, on the same terms, with the GBP15m RCF facility extended to 31 August 2024 and the GBP10m overdraft facility renewed through the normal annual process.

TClarke comfortably passes all bank covenant tests during 2020 and 2021 under the possible scenarios modelled.

The strength of the Group means that it does not envisage utilising any of the government backed loan schemes.

Outlook

Forecasts for the full year are dependent upon timing of sites restarting and the productivity achieved. A number of possible scenarios have been modelled, each of which results in an underlying operating profit for full year. The current uncertainty and resulting range of possible outcomes means that it is not possible to give accurate market guidance for the full year at this time. The Group will provide a further update with its half year results on 21 July 2020.

Mark Lawrence, CEO commented

"These are truly unprecedented times for all of us, TClarke is taking decisive action to protect our business. Throughout this period we have remained operational and our teams have been working hard planning to ensure that we can get our people back to work safely and resume the best productivity, whilst seeking out new opportunities to further strengthen our forward order book and remain the contractor of choice."

28 May 2020

Ends

"The information contained within this announcement is deemed by the Group to constitute inside information under the Market Abuse Regulations (EU) No. 596/2014."

For further information, contact:

TClarke plc

Mark Lawrence - Group Chief Executive

Trevor Mitchell - Finance Director

Tel: [phone]

www.tclarke.co.uk

Cenkos Securities plc (Corporate Broker)

Max Hartley (Corporate Finance)

Nick Searle (Sales)

Tel: [phone]

www.cenkos.com

RMS Partners

Simon Courtenay

Tel: [phone]

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May 28, 2020 02:00 ET (06:00 GMT)