TIDMADT
RNS Number : 5614U
AdEPT Technology Group PLC
07 April 2021
7 April 2021
ADEPT TECHNOLOGY GROUP PLC
("AdEPT" or the "Company" or the "Group")
Trading Update
and
New Banking Arrangements
AdEPT (AIM: ADT), one of the UK's leading independent providers
of managed services for IT, unified communications, connectivity
and voice solutions, is pleased to announce a trading update for
the financial year ended 31 March 2021 ("FY21"), ahead of the
Group's audited results which are expected to be released in July
2021.
* Earnings before interest, tax, depreciation, amortisation and
excluding one off acquisition and restructuring costs and share
based payments
Trading Update
The Board is pleased to report that, as expected, the Group
delivered a resilient performance in Q4, despite the ongoing
challenges of the pandemic. Sustained customer demand avoided any
need for the Job Retention Scheme ("furlough scheme") in Q4, which
had been utilized by the Group in Q1 and Q2. The Group expects to
close FY21 in-line with current market forecasts for revenue and
EBITDA* set in February 2021, following the reintroduction of its
financial guidance.
The Group continued to have strong cash flow generation in Q4
2021 and senior net debt as at 31 March 2021 was in line with
market expectations at GBP26.1m, which includes the repayment of
the deferred Q1 VAT liability in early Q4 and the cash costs of the
new bank facility arrangement fees.
New banking arrangement
AdEPT's strategy remains to grow both organically and by
acquisition, to consolidate a fragmented market and bring enhanced
capability to customers, leveraging the Group's banking facilities
which are supported by a strong balance sheet and high cash
generation.
The Board is, therefore, pleased to report that the Company has
signed a new enlarged banking facility agreement with NatWest and
Bank of Ireland, to support its growth ambitions with a declared
intention to acquire one or two complementary, earnings enhancing,
companies each year.
This agreement is for a three-year term, extendable by one year,
and provides the Company with up to GBP70m senior debt, comprising
a GBP35m revolving credit facility, a GBP15m term loan, and a
GBP20m accordion facility. This new facility replaces the GBP40m
revolving credit facility, which was due to expire in February
2022.
The new bank facility is on the same commercial terms as the
facility it replaces.
Dividend
The directors have taken a prudent approach to the declaration
and payments of dividends throughout the pandemic. As a result and
in line with market expectations, the Board confirms that no final
dividend will be proposed in FY21. The Board will provide
shareholders with an update on the Company's dividend policy in the
announcement of its interims results for the six months to 30
September 2021.
Operational resilience
Despite home working, the Group has made considerable progress
with Project Fusion, its project to move all Group divisions onto a
single set of operational and financial systems. Branded as One
AdEPT, it creates a platform for the integration of future
acquisitions, as well as enabling greater cross selling
opportunities and operational insight. With seven out of eight
operational sites now using the centralised systems and platform,
the project is more than 80% complete.
AdEPT has strong presence in the Public Sector, and modest
exposure to the sectors that have been most impacted by the
pandemic (such as travel, high street retail and leisure). This has
shielded the business from the extreme impacts of the lockdown
restrictions and enabled a resilient and encouraging performance
through this remarkable period.
Outlook
The pandemic has accelerated tremendous change to the way we
work.
In the early lockdowns, organisations sought rapid tactical
solutions to fulfil their immediate technology and communication
requirements, enabling employees to function effectively in the new
working environment. With the chaos of the early lockdowns behind
us, these same organisations are now beginning to evaluate
strategically the positive and negative impacts of the
pandemic.
They are now assessing the long-term requirements of their
operations, including; integrated cloud-centric technologies,
streamlined contact centres, high-speed resilient networks, and
secure ICT platforms, which protect against a myriad of cyber
threats.
With its comprehensive portfolio of capabilities and the One
AdEPT platform, the Group is very well placed to capitalise on the
opportunities presented by this accelerated change.
The marketplace remains fragmented, with sub-scale operators
that would benefit from being part of AdEPT, with its scale,
breadth of capability, and infrastructure for growth. We have
re-instigated our search for complementary, earnings enhancing
acquisitions and have identified potential targets that would
strengthen our cloud-centric strategic services and our presence in
key vertical markets.
With all this in mind, the Board remains confident in the
prospects for the Group in the new financial year and beyond.
Ian Fishwick, Chairman of AdEPT, said:
"The major story of the last 12 months has been the dramatic
acceleration in home working and the resultant impact on the
ability of our customers' workforce to securely access their
technology infrastructure remotely. Change brings transformation in
thinking and behaviour and, in FY21, AdEPT has proven its ability
to deliver transformational solutions and support its customers,
enabling them to adapt and perform under exceptional
circumstances.
"Given the critical nature of IT and Communications, AdEPT
employees were classified as key workers early in the pandemic.
This enabled us to continue servicing our customers and rapidly
deploying solutions which supported the NHS and thousands of
educational establishments, as well as many businesses, delivering
important services, in a time of crisis. The AdEPT team has
performed incredibly well in the face of health and logistical
challenges, and I am immensely proud of their achievements.
"With over 50% of the UK adult population now vaccinated and the
Government implementing its roadmap out of lockdown, we feel more
optimistic about the future of the UK economy and what this means
for our business. We believe that the pandemic has served to
reinforce the importance of our core competences and that there is
increasing demand for the solutions we provide.
"The new financial year presents new growth opportunities for
the Group, both organic and via acquisition, as we look to
capitalise on the opportunities of a growing market, accelerated by
the change brought about by the pandemic. With One AdEPT now 80%
complete we also have the infrastructure to build further
scale."
Phil Race, Chief Executive Officer of AdEPT, added:
"Effective technology and communications have been the saviour
of many companies and institutions during the pandemic, enabling us
to work from home seamlessly, to educate our children remotely, to
be diagnosed by doctors virtually, and to purchase products
digitally, all in secure technological environments. These are now
viewed as necessities and this creates a very strong opportunity
for AdEPT as a provider of unified communications, IT
infrastructure and networking.
"Our mission remains 'uniting technology, inspiring people'. We
are optimistic for the future of the technology market, and in turn
for the prospects of AdEPT."
Enquiries:
AdEPT Technology Group Plc
Ian Fishwick, Chairman Tel: 07720 555 050
Phil Race, Chief Executive Tel: 07798 575 338
John Swaite, Finance Director Tel: 01892 550 243
N+1 Singer (Nominated Adviser
& Broker)
Shaun Dobson / Iqra Amin Tel: 020 7496 3000
Belvedere Communications
Cat Valentine Tel: 07715 769 078
Keeley Clarke Tel: 07967 816 525
adeptpr@belvederepr.com
About AdEPT:
AdEPT is one of the UK's leading independent providers of
managed services for IT, unified communications, connectivity and
voice solutions. AdEPT's tailored services are used by thousands of
customers across the UK and are brought together through the
strategic relationships with tier-1 suppliers such as Openreach,
Vodafone, Virgin Media, Avaya, Microsoft, Dell and Apple.
AdEPT is listed on the London Stock Exchange (AIM: ADT). For
further information please visit: www.adept.co.uk.
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END
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