Touchstar PLC Update on trading and impact of Coronavirus (3000I)

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RNS Number : 3000I

Touchstar PLC

01 April 2020

Touchstar plc

(the "Company", "Touchstar" or the "Group")

UPDATE ON TRADING AND IMPACT OF CORONAVIRUS

Touchstar plc supplies turnkey mobile solutions to the logistics, warehousing and fuel delivery markets in addition to providing access control to high profile and public sector buildings.

PROTECTING OUR EMPLOYEES, CUSTOMERS AND BUSINESS

Touchstar is a well-established long-standing company and we take care, and pride ourselves, in dealing fairly with the many stakeholders we rely upon across the business.

We have acted quickly to follow Government guidelines, helping to prevent the spread of the virus and safeguard the safety of our staff. We have re-engineered our processes to maintain customer support to our clients - some of whom are operating critical services, and continue to deliver new products whilst functioning in line with the advice of the Government.

First quarter trading was broadly on budget with growth from continuing businesses up 40% compared to the first quarter of last year.

However, given the current and likely impacts of coronavirus we are now planning for prolonged uncertainty. It is impossible to provide clarity on the outlook for the weeks and months ahead, we have set out the information that we are able to in this update.

Our priority is the safety of our employees and our clients.

During this period, with support from the Government's Coronavirus Job Retention Scheme, we intend to maintain employment of all staff for as long as is practicable.

We remain committed to providing the best customer service and support to our clients that we can, ensuring that they can function effectively.

IMPACT ON REVENUE

We, like other businesses, have seen a reduction in new business enquiries and are planning that this rate of decline will increase. We also expect the Government advice on business activity to become more strident in the coming weeks.

We have had a good first quarter, and we still have outstanding orders to ship to customers over the coming months.

FINANCIAL POSITION

Touchstar has always tried to maintain a strong balance sheet, in the first quarter we were cash neutral having made our normal payments to staff, suppliers and landlords (including March quarterly rent payments). We have no debt.

In order to protect our financial position, we are reducing cash expenditure to protect our liquidity in the short term whilst continuing with a few key long-term strategic programs. In our supply chain we will only spend where necessary to deliver confirmed orders.

As I mentioned earlier during this period, with support from the Government's Coronavirus Job Retention Scheme, we intend to maintain employment of all staff for as long as is practicable - the company has asked everyone in the group to contribute, as only working collectively will we make a real difference, to support the business, protect jobs and help each other in the coming months.

LIQUIDITY OUTLOOK

There are many forward scenarios, we are determined to navigate our way through this uncertainty.

We start from a position of having no debt and cash resources. Additionally, we currently have a high-quality debtor book of circa GBP850,000. Many of our customers are very busy, are key to keeping the basic infrastructure of the UK operating, and continue to pay in a timely manner.

We believe that Touchstar should meet the eligibility requirements of the Coronavirus Business Interruption Loan Scheme, being a UK incorporated company that makes a material contribution to economic activity in the United Kingdom. We intend to approach our banking partners to determine the most effective overall solution.

AUDIT AND RELEASE OF RESULTS

The company is still planning to announce its final results for the year ended 31(st) December 2019 in April, although with auditors also changing their work practises this may slip. Nothing has changed in our historic results and I still expect them to be in line with our last guidance on the 5(th) February.

LOOKING FORWARD

Providing forward guidance is impossible in the current environment. As and when we are able to provide further information, we will do so.

The outlook during this crisis remains uncertain, we are in defensive mode, working tirelessly, with a complete focus on navigating this event, and believe we will return to growth when the economy recovers.

Keep safe and help the NHS by following the guidelines.

Ian Martin

Chairman

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) ("MAR") prior to its release as part of this announcement and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For further information, please contact:

 
 Touchstar plc                     Ian Martin             0161 874 5050 
   Mark Hardy                                             0161 874 5050 
                                   Mike Coe/ Chris        0117 945 
 WH Ireland - Nominated Adviser     Savidge                3472 
 

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April 01, 2020 02:00 ET (06:00 GMT)