Cello Health PLC - COVID-19 Update
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR"). Upon the publication of this announcement, the inside information is now considered to be in the public domain for the purposes of MAR.
FOR IMMEDIATE RELEASE
('Cello' or the 'Group')
Current Trading and Operations
Following the publication of the Preliminary 2019 Results on
Our overriding objective in the current crisis has been to ensure the safety of our employees. We have followed appropriate advice in the countries where we operate. The entire employee base of the Group has been working remotely for over two weeks and delivering largely uninterrupted services to clients. The Group's IT infrastructure is robust and the transition to full remote working has been achieved with great effectiveness. Where delivery methods have been compromised through the need for social distancing or because of more limited access to healthcare professionals (for example, in areas that are traditionally event based, or in the instance of face to face research) then alternative digital methodologies have been successfully deployed.
The Group has a strong cash position and is encouraged by the good progress made in the first quarter against its plans. Nevertheless, the Board is prudently reviewing the cost base in light of the changed trading environment. In many cases, budgeted hiring plans and uncommitted expenditure are being reduced or deferred. In those parts of the Group which are impacted by client deferrals or cancellations, appropriate staff cost saving initiatives, including part-time working and furloughing, will be implemented. In addition, the Board have agreed not to proceed with their planned inflationary pay rises for 2020 and to institute a 10% reduction in their salary and fees for a three month period. In addition, cash flow is being tightly controlled, and major outgoings delayed where possible, including VAT payments and US tax payments where permitted by law. Capital expenditure will also be appropriately reduced.
The Group has a strong balance sheet and remains cash generative. However, in order to maintain as much flexibility as possible throughout this period of uncertainty, the Group has decided to withdraw its full year final dividend resolution of 2.95p which was to have been tabled at the AGM on
Many clients, particularly in the pharmaceutical and health sectors, are continuing to commission new work. However, in other parts of the business where this is not the case, we have experienced some disruption as the wider economic effect of COVID-19 unfolds and we are enacting contingency plans to limit the impact. Due to the uncertainty around the level and duration of disruption, the Board is not currently able to provide clarity regarding the outlook for 2020. Further updates will be provided once there is greater visibility on the trading environment.
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020 7812 8460
Mark Scott, Chief Executive
Mark Bentley, Group Finance Director
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020 7397 8900
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020 7466 5000
Notes to Editors
For further information, please visit: https://cellohealthplc.com
This information is provided by RNS, the news service of the
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