ALT Altitude Group Plc

TIDMALT

RNS Number : 1734S

Altitude Group PLC

07 July 2020

7 July 2020

Altitude Group plc

(the "Company" or "Altitude")

Trading update

Altitude Group plc (AIM: ALT), the operator of the leading marketplace for personalised products, provides an update on its progress since it last reported on 23 March 2020 to date, a period that has been dominated by the COVID 19 pandemic.

Trading had been as forecast from January through to mid-March, with 175 suppliers participating in the Preferred Supplier Program from 1st January 2020 and AIM membership continuing to grow.

As the enormity of the crisis evolved, we took clear, practical and decisive action to manage cash resources through the limitation of discretionary spend and marketing costs. Additionally, on 23 March, for the health and welfare of our employees and in accordance with government guidelines, the Company transitioned quickly and seamlessly to a remote working model across the UK and US without detriment to its ability to serve the AIM network.

At the onset of COVID-19, the Company quickly pivoted to provide educational information, SME guidance on government programs, supplier business operations updates, virtual events and group access to Personal Protective Equipment (PPE) products via trusted supplier sources. Through these efforts, membership numbers are steady at c. 2136 AIM Member, with average distributor revenue increasing to c. $1m pa and aggregate member revenue of circa $2.2 Bn. Our VIP supplier partners remain unchanged at 175 from our last update.

From mid-March and throughout April and May, our supplier partners reported sharp year on year declines of up to 80% in regular promotional product orders, in-line with wider industry reporting. With US States beginning to emerge from shutdown, activity has increased through our marketplace with demand for traditional products showing modest increases. Industry reporting supports order activity for June at around 50% of 2019 levels.

Cash and Liquidity

Cash at 31 March 2020, was GBP2.5m, and as of 2nd July is GBP2.0m. Current cash does not include approximately GBP1.0m of extended receivables, the deferral of which was attributable to COVID-19. The Company was able to benefit from US government programs, receiving $0.5m in funding under the US Federal Payroll Protection Program. The Company is confident that all conditions for the forgiveness of the funding received under the Program have been met, and that the deferred receivables are collectible. The Company remains debt-free, continues to be cautious in its approach to all discretionary spend and is carefully managing cash whilst adapting marketing and sales plans to meet the changing needs of AIM Members and suppliers.

Revenue from subscription and fixed program fees, comprising approximately 25% of Company's revenue, are not reliant on transactional volume and remain minimally affected by COVID-19. The significant COVID-19 related reduction in other revenue during the quarter to June 20 and which is reliant on transactional volume, will adversely impact the Company's cashflow in the quarter to September. However, subject to continued steady recovery in transactional volume through 2020 in the promotional products market, we believe the Company has sufficient financial resources and liquidity to see the business through to more normalized market conditions.

Outlook

The Company has adapted quickly and well in navigating the initial challenges imposed by the COVID-19 pandemic and subsequent government lockdown. Given, the continued high level of uncertainty the Company remains unable to give any guidance for the 12 month trading period to the end of March 2021, but wishes to reassure shareholders that the Company remains focused, nimble and responsive to the current crisis. The Board is confident that Altitude will continue to progress in the new and emergent post COVID-19 environment. We continue to enjoy the support of our supplier partners and AIM members, many of whom have expressed deep gratitude for the assistance the Company has provided to them during the crisis.

As a result of the reporting challenges caused by COVID-19 and particularly in establishing the quantum of the revenue accrual up to March 2020 for partners on annual service fee agreements, the Company intends to announce full year results for the 15 months ended 31 March by the end of September 2020.

Enquiries:

 
 Altitude Group plc                     Via Instinctif - 020 7457 
  Nichole Stella, Chief Executive        2020 
  Officer 
  Graeme Couturier, Chief Financial 
  Officer 
 finnCap ltd 
  Jonny Franklin-Adams (Corporate 
  Finance) 
  Charlie Beeson (Corporate Finance) 
  Richard Chambers (ECM)                 020 7220 0500 
 Instinctif Partners (Financial 
  PR) 
  Matthew Smallwood 
  Chantal Woolcock                      020 7457 2020 
 

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