Continued uncertainty for property specialists amidst the crisis
Yorkshire-based property and building supplies companies Harworth Group and SIG have today both released further details of their response to the virus pandemic.
Rotherham-headquartered Harworth Group says its strong balance sheet means it is well positioned to mitigate any short-term market volatility, while SIG has begun re-opening selected sites across its Distribution and Roofing businesses.
Harworth highlights its recent completion of a key commercial land sale at Skelton Grange, Leeds, for £13m.
New lettings have further reduced its business space vacancy rate to 4.8% (FY 2019: 6%).
And a £30m increase to its revolving credit facility has been agreed with lenders, increasing this facility to £130m, providing increased operational flexibility.
Harworth’s update adds: “As reported in our Preliminary Results announcement on 17 March 2020, Harworth entered this unprecedented period in a strong financial position, with cash and undrawn debt facilities of £36m (at 31 December 2019).
“With a number of house builder customers announcing reduced activity on live construction sites and new purchases, the company is prioritising its capital expenditure on those of its major development sites that have agreed sales in place for later in the year.
“Whilst it is too early to say with any certainty, the Board expects the disruption caused by the COVID-19 pandemic will likely have a material influence on the company’s results for the financial year to 31 December 2020.”
Sheffield-based specialist building materials supplier, SIG, says 15 sites are now open across its Distribution business and 20 sites are open across its Roofing business.
The Group is planning for the majority of its sites to be open by mid-May.
The firm’s update explains: “In preparation for the lifting of UK Government restrictions, we are regularly reviewing operations and considering the measures we will require to ensure the safe return of our employees and a return to fully operational businesses across the UK.
“We have remained open in most of our other countries of operation and trading has continued on a near-to-normal basis in Germany, Holland and Poland, all within local government guidelines in each country.
“SIG has taken decisive actions to manage its operating cost base.
“With the temporary closure of operations in the UK and Ireland, the Group has accessed the UK Government’s Coronavirus Job Retention Scheme and furloughed approximately 2,000 employees across its sites and support functions.
“It was announced on 30 March 2020 that, as a temporary measure from 1 April 2020, the Board of Directors would take a pay reduction of 50% and the Group Executive Leadership Team a pay reduction of 20%.
“As a result of strengthened cash control measures, the Group has been able to preserve its liquidity position and, at the close of business on Friday 24 April 2020, it held cash of £142m.
“The Group remains in dialogue with its lending group in order to release additional liquidity as required.”
