Listed manufacturer limiting itself to essential operations
Doncaster-based manufacturer Polypipe Group says it is “winding down its operations”, apart from those activities necessary to support the Government’s battle against COVID 19.
Operations which will continue include the parts of the Group supporting the NHS in very specific roles in increasing capabilities to cope with the inevitable increase in COVID 19 patients.
For example, the Group’s Nuaire business is manufacturing ventilation for the Royal Marsden Hospital.
Polypipe, which makes plastic piping and ventilation systems, will also continue with its Building Products business, as this has been requested to manufacture special pipe for emergency medical use.
And the firm says it is necessary to keep supplying some of its plumbing and drainage products that are needed for urgent repair and maintenance across the country to keep essential projects and services running.
Martin Payne, chief executive officer, said: “In these unprecedented times we have acted swiftly and decisively, taking our decisions with the best interests of our employees and customers foremost in our minds.
“The Board’s thoughts are with all of our employees and their families in what are worrying times for us all.
“The Group’s strong balance sheet and cash generation, together with our talented people and clear strategy gives the Board confidence that it will overcome whatever challenges await.”
Polypipe says both its revenues and profits will be adversely impacted in the coming months by the decision to wind down operations and by the effect of COVID 19 on its end markets.
Its Board has decided to withdraw its recommendation to pay a final dividend of 8.1 pence per share on 28 May 2020. This decision will ensure £16m worth of cash will be retained in the business.
The Group has a £300m Revolving Credit Facility, committed through to November 2023, and has taken pre-emptive action in drawing down all but £15m of the unutilised facility.