Update on COVID-19 and Financial Reporting
EPE Special Opportunities Limited
Update on COVID-19 and Financial Reporting
The Board of EPE Special Opportunities Limited ("ESO" or the "Company") would like to update the Company's shareholders on how the spread of COVID-19 is impacting the Company and its investments.
The Board of ESO note the guidance recently issued by the Financial Conduct Authority and the Financial Reporting Council recommending a two-week moratorium on reporting for listed companies.
The Board has adopted this guidance and therefore will not release audited financial statements for the year ended 31 January 2020 before the end of this moratorium (6 April 2020).
The Company confirms that it expects to announce results in line with those set out in the Company's Trading Statement dated 12 February 2020.
Impact of COVID-19
The long-term impact of COVID-19 on the Company and its portfolio remains uncertain.
The Investment Advisor ("IA") is working closely with the management teams of portfolio companies to respond to this dynamic situation and is apprising the Board regularly as the epidemiological situation develops.
The Board would like to provide the following commentary to update shareholders.
· The portfolio has taken all appropriate steps to protect and promote the wellbeing of colleagues (including adherence with local government advice).
· The Company maintains strong liquidity of £26.4 million (as at 31 January 2020) and operates with modest committed outgoings.
· The Company has £3.9 million of outstanding ULNs and could in extremis defer the proposed repayment of £2.0 million in July 2020 to July 2022. The Company has no other third-party debt outstanding.
· The Board and IA have reviewed the business continuity plans of the Company's key operational service providers and are satisfied of their resilience.
· The portfolio has taken early and prudent steps to manage its liquidity, financial position and trading outlook; these steps are under active review by the IA and the management of the portfolio companies.
· The portfolio has a low level of third party leverage (0.7x last twelve month EBITDA to net third party debt as at 31 January 2020) and has strong relationships with all external lenders.
· Luceco plc, the Company's largest asset, updated the market on its financial position and outlook in a RNS announcement on 24 March 2020. Luceco has traded on budget for first quarter of 2020, has modest financial debt of 1.1x net debt to EBITDA and significant available liquidity with £24 million undrawn against committed banking facilities (as at 31 December 2019).
· In the interest of employee safety and in line with government advice, Whittard has temporarily closed its 46 retail stores. The business traded well for the first quarter of the 2020 and is currently trading ahead of prior years and budget in its ecommerce channel. The business continues to review its fixed and variable costs and will benefit from the announced government schemes regarding furloughing, business rates and other taxation. The business has no third party debt.
· David Philips has reduced trading activity in line with demand from the UK property market. The business traded well in the first quarter of the 2020 and has a strong order book for the remainder of the year. The business continues to review its fixed and variable costs and will benefit from the announced government schemes regarding furloughing, business rates and other taxation.
· ESO and the IA is prepared to support portfolio companies financially and operationally over the coming months.
Clive Spears, Chairman, commented: "The COVID-19 pandemic is presenting the global economy with unparalleled challenges. The Company is well positioned for the uncertainty with strong cash liquidity. The Portfolio benefits from low leverage but faces an evolving trading and operational environment. I would like to thank the Investment Advisor, EPIC Private Equity, the Company's other advisors and the management of the portfolio companies for their hard work and dedication in this challenging period - which is unprecedented in recent memory. I wish all shareholders the best of health at this difficult time."
The person responsible for releasing this information on behalf of the Company is Amanda Robinson of Langham Hall Fund Management (Jersey) Limited.
EPIC Private Equity LLP
+44 (0) 207 269 8865
Langham Hall Fund Management (Jersey) Limited
+44 (0) 153 488 5200
Cardew Group Limited
+44 (0) 207 930 0777
Numis Securities Limited
+44 (0) 207 260 1000
Stuart Skinner / Huw Jeremy
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