1st Apr 2020 10:48
(Alliance News) - Kin & Carta PLC on Wednesday withdrew its dividend and added that it may be forced to make some redundancies or furlough staff to save costs during Covid-19.
The business consultancy firm said the virus outbreak has caused it "unexpected discontinuity and uncertainty".
Kin & Carta added: "This has led a few of our clients to scale back or suspend some projects, alongside a partial slow down in our pipeline conversion. 78% of our revenue is from multi-year client engagements and as such we are seeing many large digital transformation programmes continue as planned. Until the scale and duration of disruption is more clear, we will not be providing further guidance.
"We have initiated a cost reduction programme across the business which includes a number of targeted redundancies and furloughs, as well as voluntary pay reductions for executives and staff. Should the risks impact our business further, we have additional cost reduction measures at our disposal."
The company's proposed interim dividend of 0.65 pence per share has been cancelled. It said it will "consider the timing and the quantum of dividends when greater clarity around the business has returned".
Kin & Carta said: "We have updated our fiscal stress tests across the business, modelling various levels of revenue decline, reduced cash flows and the related mitigating steps available to reduce our cost base and conserve cash. We do not currently anticipate liquidity constraints, but anticipate a potential technical breach of our current net debt to earnings before interest, tax, depreciation and amortisation covenant for a period of time given the current circumstances. Following ongoing dialogue with our banks, they are supportive of our business and the measures we are implementing."
Shares in the company were 4.9% lower at 58.00p each in London on Wednesday morning.
By Eric Cunha; [email protected]
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