20th Mar 2020 14:26
(Alliance News) - Zoetic International PLC on Friday said the Covid-19 virus has "caused some disruption to the company's business" and has forced the company to lay off six staff members.
The cannabidiol and natural resources firm explained that convenience stores in the US have seen drops in sales and footfall, and Zoetic predicted this will lead to a reduced demands for its products over the coming months.
Zoetic's online sales meanwhile, have also showed signs of being impacted by the pandemic, the company said consumer are showing "increasing caution with their disposable income".
Elsewhere, tumbling oil prices will lead to reduced revenue in Zoetic's oil and gas division, the company added.
"Zoetic is taking prudent actions to manage these challenges. As previously reported, the management team has significantly reduced the company's cost base in the past six months but, in the light of these new events, further action is now underway. Zoetic is adopting a set of exceptional operational measures to significantly reduce its costs and navigate through these unprecedented times," it said.
The company said it has laid off six staff members in the US and is mulling placing more on unpaid leave.
"Despite the ongoing problems in retail markets, the company's distribution partners remain very supportive and, whilst this is no longer the right time to launch an extended distribution of Chill products in the USA, discussions with Zoetic's partners continue to be based on when, and not if, the launch should take place," Zoetic said.
"Likewise, in the UK, Zoetic continues to generate interest from prospective retail partners for Zoetic and Chill branded products. The board naturally remains cautious about predicting when this interest may materialise into demand, but the ongoing enthusiasm for the company's products provides the board with optimism that, when this current downturn passes, Zoetic's business model remains attractive."
Shares in the company were 9.7% lower at 3.84 pence each in London on Friday afternoon.
By Eric Cunha; [email protected]
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