The energy and environmental consultancy has arranged increased facilities from its lenders and agreed new financial covenant tests for all its borrowing, while management and some staff have taking pay cuts to help reduce costs and preserve cash on top of measures announced last month.
With the effect of the Covid-19 only starting to be felt in the last two weeks of March, fee revenue in the first quarter of 2020 of £125.4mln was down 7% on the same period last year, with more than half of fees coming from government or quasi-government work.
Performance in energy was “stable overall” despite oil price volatility; levels of activity in consulting in the UK & Ireland were lower but benefited from high public sector exposure both sides of the Irish border; high public sector exposure provided “some resilience” in Norway; services activity was lower in the UK and Netherlands in water ahead of the new regulatory cycle and social distancing measures.
North America saw “a good all-round performance”, with benefits from a high public sector exposure in some areas, although the Environmental Risk business was impacted by Covid-19; in the Australia Asia Pacific business defence spending was stronger, property was lower and transport infrastructure was hit by delays in project start-ups.
RPS said the increased financial liquidity will enable it “to navigate the challenges of the COVID-19 pandemic and take advantage of the economic recovery as it comes through”.
House broker Liberum said increased flexibility from lenders “comes at a cost” and so reduced full year earnings per share forecasts for this year and next by 7% and 6% respectively.
Published at Mon, 27 Apr 2020 07:40:00 +0000-RPS Group increases liquidity after mixed effects of pandemic on trading