6th May 2020 11:28
(Alliance News) - Ricardo PLC on Wednesday reported a drop in April order intake and said that it has secured an increase to its loan facilities and a relaxation to loan covenants test amid the virus disruption.
The engineering company, which withdrew its financial guidance due to the uncertainty created due to Covid-19 pandemic, upped its revolving credit facility to GBP200 million, increasing the amount undrawn and available to GBP70 million and providing the company with increased committed funding available for the remaining term through to July 2023.
In addition, the adjusted leverage covenant on the loan was increased to 3.75 times from 3.0 times for the next two test dates of June 30 and December 31. The covenant will return to 3.0 times for the June 30, 2021, test date.
The interest cover financial covenant remains at 4.0 times for each test date.
At April 30, the company had a net debt of GBP80.8 million and held liquid cash reserves of GBP66.0 million and uncommitted overdrafts of GBP16.4 million.
The Shoreham, England-based company also said that it has also acted "quickly" to cut costs and preserve cash, including careful management of employee costs, as well as maintaining tight control of all capital expenditure and discretionary costs.
For the third quarter, the company recorded an order intake of GBP30 million per month. However, orders plummeted to GBP19 million in April.
"Against the backdrop of Covid-19, some of our businesses continue to perform well whilst others have been more adversely impacted," Ricardo explained.
Trading in the company's Energy & Environment and Defense businesses was good in the third quarter and benefitted from a largely public sector customer base.
The Automotive-related and Rail businesses in Europe and the US, however, saw some slowdown in project delivery due to lockdown restrictions. The Performance products business also saw an impact from the closure of some of its customers' production lines.
Chief Executive Officer Dave Shemmans said: "Ricardo is a diverse and resilient group, and we face the continuing uncertainty with good levels of order intake, together with a strong position in respect of financing facilities and liquidity, all of which position us well for when economic stability returns".
Shares in the company were up 6.1% at 392.52 pence each in London on Wednesday morning.
By Tapan Panchal; [email protected]
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