TIDMINCE
RNS Number : 3650A
Ince Group PLC (The)
29 September 2020
The Ince Group plc
("Ince" or the "Group")
AGM statement
Trading update
The Ince Group plc (AIM: INCE), the international legal and
professional services company, is today holding its closed AGM at
its offices in Mayfair, London and provides the following trading
update.
The Group continues to follow the advice from the World Health
Organization and local and regional governmental bodies in respect
of the Covid-19 pandemic and the health and safety of its clients,
staff and partners remains of the utmost importance. The Group's
offices in different locations are at varying stages of returning
to office-based working according to local conditions and in the UK
staff are encouraged to work from home where possible. In all
locations the Group's remote working protocols continue to be very
effective in supporting clients and the business and can be
deployed rapidly if conditions change at short notice.
Trading update
Overall the Group remains on track to achieve the Board's
expectations when the annual accounts were signed at the end of
July. The Board remains focused on cash management and the Group
remains well positioned for business to return quickly when normal
trading conditions resumes.
Trading from 1 April 2020 to 31 August 2020 produced revenues
ahead of the same period last year. Geographically, all the
overseas offices have delivered revenues ahead of the same period
last year with improving gross margins and all are now achieving a
positive contribution to the Group. The UK has not performed as
well as the impact of Covid-19 has limited activity in,
particularly, the aviation, real estate and corporate sectors, in
part offset by more stable levels of activity in both shipping and
dispute resolution.
The Group continues to monitor and, where necessary, limit
overhead expenditure. In the year this has involved a limited
global programme of some 50 redundancies amongst fee earners and
support staff in areas where it is not expected that business will
recover sufficiently in the medium term. Further reductions in
overheads will be achieved when the Group's new practice management
system is rolled out beyond the UK, adding to the originally
envisaged synergies of the Ince deal. This will be possible when
travel restrictions are eased.
The Group's cash holdings at 31 August 2020 were GBP4.9 million
(31 March 2020: GBP5.3 million) and net debt was GBP8.0 million (31
March 2020: GBP9.0 million). As expected, cash collections have
remained at year end levels, particularly in Greater China where
travel between mainland China and Hong Kong remains restricted.
Despite the Group's policy of fully providing against debtor
balances over 180 days old, collections continue to be vigorously
pursued and profits are boosted when such collections occur - for
example GBP1.2 million of debtor balances that were provided as at
31 March 2020 have now been collected.
Outlook
In the light of recent announcements concerning Covid-19
restrictions in the UK, there is now increased uncertainty over a
more protracted period.
Cash projections remain the same as outlined during
presentations of the Group's year end results, with net debt at 31
August 2020 having reduced to GBP8 million (from GBP9 million at 31
March 2020). It remains the Board's expectation that the cash
position of the Group will start to improve from Q4 onwards. The
Group's recently deployed cash management reporting tools (through
its internally developed practice management systems) have been
highly effective in enabling real time active management of its
cash position over the year to date.
Since the year end and after lengthy negotiations with the local
regulator, the Singapore office's international law practice has
been consolidated with the Incisive Law local law partnership
(previously separately owned) which significantly improves the
viability of that office. We have also concluded lengthy
negotiations to establish an office in Cyprus, another jurisdiction
with strong marine activity. Other lateral hires which have been
under negotiation for many months have continued to be concluded in
the UK and overseas and these new partners are beginning to engage
and generate revenues as they join following notice periods.
The Board recognises that working practices are likely to change
over coming years and that the Group's current office space may be
too large or may no longer be suitable. In this context, investors
should note that the Group's material long term property
commitments all have an opportunity for a tenant's break within the
next three years. This will allow the Group the flexibility to meet
such changed working practices and, in the medium, the potential to
achieve significant further operational cost savings.
Overall the business continues robustly with adjustments to the
cost base being continuously made and numerous short and medium
term cost saving opportunities identified for action.
The Group is therefore poised to weather the challenges of the
current market conditions and uncertainties and to perform strongly
once more normal circumstances return.
Dividend
In the light of the expected cash flow profile, the board does
not intend to re-introduce dividend payments to shareholders at the
time of the half year report but will keep this under consideration
in future announcements.
Half year results for the six months ending 31 September
2020
A further general update on the Group's progress will be made
with the announcement of its interim results, expected to be made
in early December 2020. A further trading update will be scheduled
between that announcement and the July 2021 announcement.
AGM and presentation
The proceedings of the AGM will be accessible through the
Investor Meet Company platform and following the conclusion of the
AGM business there will be a presentation and Q&A session for
all investors through the Investor Meet Company platform. Investors
should register via www.investormeetcompany.com and follow The Ince
Group plc. Once registered, shareholders will be automatically
invited to this AGM and future online meetings held on the
platform.
FOR FURTHER INFORMATION, PLEASE CONTACT:
The Ince Group plc investorrelations@incegd.com
Adrian Biles, Group Chief Executive
Simon Oakes, Chief Financial Officer
Arden Partners plc
Nominated Advisor and Broker to the Company +44 (0) 20 7614 5900
John Llewellyn-Lloyd, Corporate Finance
Ciaran Walsh, Corporate Finance
Dan Gee-Summons, Corporate Finance
Fraser Marshall, Equity Sales
Portland Communications +44 (0) 7767 345 563
Steffan Williams ince@portland-communications.com
Simon Hamer
Riku Heikkila
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END
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