23rd Mar 2020 16:13
(Alliance News) - Bonhill Group PLC said Monday it has suspended its dividend due to the uncertainty caused by the Covid-19 spread.
Shares in the media company were down 18% in London on Monday afternoon at 9.00 pence each.
"The Covid-19 pandemic is causing significant disruption to the financial services, technology and diversity communities that we serve in our four key geographies, being the UK, Europe, North America and Asia. We have been managing the impact of the virus on our business in Asia since earlier this year which has proven beneficial in our ability to manage the recent rapid escalation of Covid-19 in those other regions," Bonhill said.
About 40% of the company's revenue - totalling about GBP24.2 million - comes from events activity across those four geographies, Bonhill said.
The company had run 16 events in 2020 but now has nothing scheduled until May at the earliest.
Bonhill said: "The vast majority of our UK, US, European and Asian events have been postponed until May 2020 at the earliest or more commonly to the third and fourth quarters of 2020; specifically the events deferred to the second half were expected to generate total revenues of GBP5.0 million, comprising approximately GBP1.8 million in the US, GBP1.7 million in the UK, GBP1.2 million in Europe and GBP300,000 in Asia."
Postponing these events are expected to result in GBP300,000 of fees.
Bonhill said the Covid-19-related cancellations is expected to shave GBP5.0 million off its first-half revenue and GBP1.9 million off gross profit. As a result, the company is undergoing several cost-cutting measures, including cutting 15% of its workforce in the UK and Europe.
The company noted it is unable to give guidance for 2020 due to the ongoing uncertainty.
"Given the lack of certainty on the outcome of 2020 and our actions to conserve cash, the board is suspending dividend payments until the outlook is clearer and more normal trading conditions have resumed," Bonhill added.
At March 20, Bonhill had GBP1.6 million in cash and a vendor loan of USD3.1 million.
Chief Executive Simon Stilwell said: "Covid-19 has had an unprecedented impact on the global community, as all businesses are being forced to rapidly adapt to overcome this crisis. The board has taken swift action to protect shareholder value by conserving cash, improving liquidity and reducing costs through headcount reductions.
"Like others, we do not know how long this pandemic will last. However, we are well-positioned to respond quickly when the end is in sight, for there will be no greater business need for events, forums and networking than when we emerge from this global crisis."
By Paul McGowan; [email protected]
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