We are now in the first days of summer and I would like to update you all regarding the situation at Centura Group as we continue to progress through the coronavirus crisis.
At the end of June Centura Group will reach the end of its financial year. The subsidiary companies have experienced mixed fortunes these past few weeks. Our smaller businesses have been able to remain operational. Our team in Surveys continue to work at reduced capacity but are still receiving enquiries for future projects. I know that there have been difficulties in finding accommodation but they have managed to continue with most of their site works. TLF and Equilux have been able to continue trading successfully and Lifespan is still working hard to secure new orders for the 20-21 financial year. Because of their greater exposure to the private sector and related future uncertainty both Buxtons and Samuely have suffered from a lack of future opportunities.
Our largest business is of course, CRL. Activities in our Scottish regional office remain at a very low level with local rules still preventing us from restarting most of our projects. It is hoped that this situation will change in the next few days. In England and Wales we have been able to restart some projects and continue on site with others. We have worked closely with all our clients to develop and agree new site working procedures to reflect hand washing, social distancing and other measures that will be required for many months as we work through this crisis. I must thank our contract teams for developing new working practices so quickly and efficiently, and also our clients for being so understanding during this difficult period. Our estimating teams have remained very active throughout and we have continued to receive some orders for future works.
At the beginning of the “Lockdown” in late March Centura Group and especially CRL experienced a very significant loss of sales almost overnight. As a private company that left us very exposed. The collection and preservation of Group cash was our utmost priority. I must take this opportunity to thank our finance team and our regional managers and directors for the huge efforts they have made to improve that situation. Alongside the collection of cash we have managed to reduce our outgoings significantly. Not only is this because of a reduction of site costs but of course the huge sacrifice made by nearly everyone in the Group by accepting Furlough, lower pay or a combination of both. The Government furlough scheme has been a huge benefit to the Group and all its employees.
As we approach the end of our financial year in June we must now look to the future. Never in our history have we been presented with such challenges. I would expect the lockdown measures to continue easing as we approach mid-summer. But all of us must continue to obey the Government guidelines to protect ourselves, our colleagues and families and the general public. If we do not then we might see a recurrence of COVID cases which may in turn lead to a return of some lockdown rules. None of us want that. I expect that certain distancing and other measures may well be in place until the end of 2020.
Our regional managers have been considering our offices and preparing them for a return of staff. We are confident that we can provide a safe working environment but we may have to limit the number of staff in an office so that we can maintain social distancing. Your regional and line managers will discuss this with their local teams over the next few weeks.
The Government has announced that the current furlough arrangements will continue until the end of July and after that the benefits will reduce with more employment costs being borne by the Group. Alongside that I hope that we will be bringing many of you back from furlough as our workload builds up. There is also the possibility of “Part Time Furlough”. As soon as we understand the terms on which that is offered we will consider how we may use the benefit.
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The Board is now planning for the 2020-2021 financial year which will start on 1st July. We estimate that Centura sales will be lower than our peak years of 2018 and 2019 during which CRL had the benefit of a very large contract with Highways England. Almost certainly the UK will be in recession this year and there will be a great deal of uncertainty in our markets. Many of our clients raise money through taxation both direct and indirect so it is hoped that projects funded in that way will continue to be awarded. Less certain will be monies spent by the retail or private sectors.
Because of the expected reduction in sales there will be some restructuring required within our businesses. There are very few companies that have not been affected by this pandemic. All businesses need to prepare for a very challenging future and a future in which much of what we have been used to may not be possible for months or even years.
These past few months have proved just what a brilliant team you all are. We must now all prepare for changes both at work and outside of work. We will adapt, we will survive and we will do whatever it takes.
CORONAVIRUS COVID 19 - ANNOUNCEMENT 2ND JUNE 2020