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