Promotions specialist confident of long term trading prospects
Stretford-based corporate promotions specialist Pebble Group said its long-term prospects remain good, in the current coronavirus outbreak.
The business, which floated on the AIM market in December 2019, issued a trading update for the year to December 31, 2019, and an assessment of how the COVID-19 crisis is affecting the business, headed by chief executive Richard Lee.
It said while it is impossible to estimate the full impact of the pandemic on the group’s performance at this stage, a COVID-19 mitigation strategy is being implemented and the board’s current view is that the company is well placed to manage the disruption and is confident in the long term prospects for the business.
Business operations are fully functioning, despite the disruption, and work patterns, which maintain the team dynamic and effectiveness while minimising risk, have been put in place.
The group said it has strong cash balances, no debt, a committed revolving credit facility of £10m and an efficient working capital model.
New measures aimed specifically at managing cash during the outbreak are currently being implemented, including a hold on non-committed capital expenditure.
Product supplies from China and elsewhere have been successfully maintained to date and this is expected to continue, it added.
However, it said there has been a substantial reduction in order intake experienced in the past two weeks in corporate programmes as clients take understandable measures to protect their people through home office working and the cancellation of travel, conferences and events.
Pebble said: “We cannot predict the longevity of this situation but there will be a financial impact resulting from COVID-19 in FY20.”
It added that new business activity in c orporate programmes in the year to date has been strong and the group currently expects to benefit from this new business in the second half of 2020.
In summary, the update said the group’s balance sheet is strong and debt free and the board is confident in the future prospects for the group and its growth strategy.
It said: “The strength and robustness of the Facilisgroup business model is being demonstrated in this uncertain trading environment and we remain confident about its prospects in 2020 and beyond.”
Facilisgroup operates primarily on a SAAS recurring revenue model – around 68% of divisional revenue. Customer (partner) numbers continue to grow in line with the management’s expectations and, although the sales processed per partner are expected to decline in the year as a result of the virus, the business remains on track for financial year 2020.
New business activity in brand addition in the first quarter demonstrates the attractiveness of its offering and the constitution of its client base, it said, and together with its geographical and sector diversity, leave the business well-placed to manage in the short term and benefit as normal business activity resumes.
As previously announced, the group intends to issue final results in line with expectations for the year ended December 31, 2019, on April 2, and will update the market further at this time.
