Companies large and small are battening down the hatches to weather the Covid-19 storm.
Purplebricks announced cost-cutting measures aimed at safeguarding its business and making best use of it £35m cash reserves. The company statement read that:
“Given the market uncertainty, the Company has taken immediate and significant measures to preserve cash and implement a lean operating model through this period. Purplebricks has undertaken a cost base assessment and has instituted a number of cost-saving measures, including reducing supplier costs and overheads. All TV and radio advertising has been suspended and online marketing costs have significantly reduced. The Company also be using the Government’s COVID-19 Job Retention Scheme and are currently assessing how to implement.”
In an update to the City, LSL Property Services PLC reported that after a healthy start to 2020 the company is experiencing rapid changes in the market. As a result it is taking action to sustain the business and will not recommend a final dividend payment for 2019.
“We last updated the market on 10th March 2020 in our 2019 Preliminary Results Announcement, when we communicated that we had seen some slight softening of our lead sales indicators in Estate Agency. Since then, we have seen a further material slow-down of our lead sales indicators in Estate Agency, and following the Prime Minister’s address to the UK, announcing a national lock-down with effect from the evening of 23rd March 2020, activity levels have dropped very sharply.”
“In response to the sharp drop in transaction volumes, we are taking a wide range of immediate and proactive measures to reduce operational costs, optimise the balance sheet, provide operational flexibility and protect our employees, customers and business partners. Key actions include the following:
· Implemented business continuity plans across all our businesses, switching to remote working
· Proactive measures across our Estate Agency, Financial Services and Surveying businesses, further details below
· Rightsizing of team activity levels to market conditions, reflecting the drop in transaction volumes by business stream
· Recruitment freeze and annual pay review suspended for the Board and all staff
· Deferred all non-critical capex
· All discretionary expenditure halted, with all non-essential marketing activities cancelled
· All Group wide acquisition activity halted for the foreseeable future
· Working closely with our business partners, with the intention of finding solutions to meet their needs in this rapidly changing environment
· To protect our employees, customers and suppliers, closure of all Estate Agency branches, in line with Government advice, with customer support provided remotely, and with Estate Agency branch staff working from home where required
· Cross-functional training to enhance workforce flexibility
· Continue to provide consistent delivery of appropriate outcomes for consumers
· Meet anticipated increased consumer demand for remortgage and protection products
· To protect customers and staff, cessation of all physical valuations in line with Government advice
· Actively working with lender clients to move a higher proportion of valuations to non-physical (remote) valuations
Belvoir Group PLC announced it final results for the year ending 31st December 2019 and posted a 43% increase in revenue – £19.3m, up from £13.4m in 2018.
Profit before tax was £5.6m (£5.5m in 2018 which included an exceptional credit of £0.6m).
The Group ended the year with a stronger balance sheet showing cash of £3.6m, double that of 2018.
Dorian Gonsalves, CEO of the Belvoir Group commented:
“Whilst 2020 will be adversely affected during the period of economic inactivity due to Covid-19, the Group has achieved a very good set of results for 2019, with outstanding revenue performance, having overcome the twin challenges of the tenant fee ban and the economic and political uncertainty surrounding Brexit.
Looking at the year ahead, trading was strong and in line with management expectation in the first two months of the year, and the recurring nature of our lettings revenue gives the Group a high degree of resilience.
The Board has acted swiftly in response to Covid-19 to put in place measures for the Group and for our franchisees, to enable us collectively to mitigate some of the short-term downturn in revenue.
Notwithstanding these measures, Covid-19 is expected to have a significant impact on trading in 2020 and therefore the Board has prudently decided against proposing a final dividend for 2019.
It is difficult to predict exactly how long this impact will continue, but the Board is confident that the Group has a strong balance sheet with adequate resources to weather the storm, and to operate within its bank covenants for the foreseeable future.
We believe that in operating a franchise model, we have both the agility and capability to emerge from the crisis in a good position to capitalise on future opportunities within the sector, and return to growth and winning market share.”
What steps is your business taking to be able to get through the coming weeks? Drop a line to EYE. firstname.lastname@example.org