CORONAVIRUS COVID-19 - Updated 24th March 2020
I would like to update everyone on the current position regarding all Centura Group companies during this fast-moving pandemic.
The most important priority for all of us is to stay healthy and protect our families and loved ones. We are all aware of the government guidelines regarding hand washing and social distancing. Those guidelines make real sense and must be followed. So must the rules regarding individual illness symptoms and the need to self-isolate. Centura Group Companies will continue to follow government guidelines.
Last night the Prime Minister advised us all of further measures detailing the reasons and restrictions regarding our daily movements away from home. With regards to work the phrase used is “Travelling to and from work, but only if it is absolutely necessary and cannot be done from home”. There is much debate this morning regarding construction activities.
I am awaiting guidance from the Cabinet office regarding construction activities. At present construction has not been completely stopped but that may change. We must prepare all our sites whether active or not to be left in a safe and secure condition pending further instruction.
The prime objective now for Centura and its companies is to remain solvent and be ready to continue normal trading whenever that may be possible. We are currently planning for 6 months from now. I will explain our strategic plan.
As I said in my previous announcement the key to continue trading is being able to work on our various site-based projects and for the clients on those projects to keep paying us. No income, no ability to pay our bills. Furthermore Centura and its companies must continue trading, no matter what, so that our trading history, our financial record and our experience over 65 years is not lost.
We have seen multiple site shutdowns. This is likely to continue. Centura will soon not be able to fund payments including wages and salaries. Furthermore as many of our clients manage their own cash flow and staff issues we may see a substantial drop in opportunities to tender and the throughput of work for our estimating teams. Inevitably, there will be a further reduction in workload for our support and clerical staff. I am afraid that I cannot “Sugar coat” this bad news. I will always be honest with you.
The government on Friday 20th made announcements regarding delayed VAT payments, increased bank loans and help for PAYE employees. All of you are PAYE. All of this is good news. What is not clear is how quickly any of us may feel the effect of these loans and grants. This week we are preparing our application for the bank loans. I hope this will be favourably treated by our lenders.
The government has stated that they do not want to see anyone made redundant because of this crisis. Neither do your Directors.
Last Friday the Chancellor announced measures to prevent redundancies. A new employment status, “Furlough” was introduced. Staff on furlough are at risk of redundancy but the government is introducing grants to try and prevent that redundancy. The grants offered are 80% of salary/wages including employer costs (NI and pension) up to a maximum of £2500 per month. The payment is subject to income tax. Employees earning above the furlough amount should expect significant reductions. No-one on furlough is permitted to work.
So what happens next?
All Directors and employees, weekly or monthly paid are at risk of redundancy. Therefore all employees may be furloughed at some point.
As I stated above, our prime objective is to keep the business alive. As our projects are stopped, our future order book will grow. When we are able to work, we will be very busy. But I have no idea how long that may take. So the Board will initially plan for 6 months from now taking us to 1st October.
To get to that point we need to remain solvent and legally able to trade. So I will need to create a core team of people who will remain with the business for the foreseeable future. It is conceivable that those people may have to work for nothing. They may be furloughed. I will call that group, Group A.
At present there are many employees whose workload is slowing down because of the crisis. They may already be working from home. There are already site-based teams who are at home because the sites have been closed. I will call those employees Group C. People in Group C are likely to be furloughed immediately.
That leaves a further number of employees who are currently working on our remaining active sites. If those sites are active then the company can reasonably expect payment for those works. I will call those employees Group B. For as long as they are on active sites with payment expected, then wages and salaries, at some level, will be due. If any of those sites close down then I am afraid that the employees involved will join Group C and be furloughed.
We can keep staff “On furlough” until the end of May. That is the best news that we might expect in this crisis. However every one of you must expect substantial reductions in your income. I am devastated to have to say that, but honesty is necessary. Each of you must now look at your own personal positions regarding mortgage payments, rental agreements and other outgoings. I am sure that most providers will treat you fairly.
I need every one of you to massively reduce any expense that you incur on behalf of the company. The less we spend, the longer we last, it’s that simple.
Every day that has passed recently has delivered bad news. That will change soon and I want all of you to be prepared for an upturn. We will all experience significant personal sacrifice and life changing upheavals. But we will get through it.
There will be many questions that you will ask. Some will be answered by your line managers but you can contact me 24/7 on email or my mobile 07710974126. I will be there for you and I thank each of you for being there for the company. I am truly sorry to have to make these announcements.
The final comment from me today is that we expect to fund a payroll at the end of March, which may include some payments to staff on furlough.
Group Chief Executive