Studio Retail Group secures £285m to preserve liquidity
Studio Retail Group has withdrawn a revolving credit facility (RCF) of £85 million and a securitisation facility of £200 million to ensure it has sufficient liquidity amid the repercussions of the COVID-19 crisis.
The trading statement revealed the RCF was fully drawn on 27 March 2020, resulting in net debt of £53 million, or cash on the balance sheet of £32 million.
Drawings under the securitisation facility stood at £198 million at the end of March 2020.
A trading update said: ”This headroom is around £5m better than we would otherwise have expected to see due to a particularly cautious approach to cash outflows in the week following the lockdown announcement, which has since been reversed.
"Drawings under the securitisation facility stood at £198m at the end of March. At present, whilst Studio continues to trade, the group has sufficient liquidity for its near-term requirements without requiring recourse to government funding schemes.
"The business saw a good cash collections performance from its credit portfolio during the important period between Christmas and Easter, although we anticipate that customers incomes will come under sustained pressure in the coming months due to the coronavirus. In line with guidance from the Financial Conduct Authority, we will offer appropriate forbearance to those customers that require relief.”
Studio Retail Group, formally known as Findel, took swift steps to conserve cash prior to the Government mandated lockdown, taking measures including deferring a number of external projects and cancelling discretionary expenditure.
Studio Retail Group Chief Executive, Phil Maudsley, said in a statement: "I would like to thank each of our colleagues for their hard work and committed approach during this unprecedented period. I am grateful for their continued support and I hope that our service has helped to make our customers' lives that little bit easier during this lockdown period."
Despite strong trading in Studio in recent weeks, given the level of uncertainty in the outlook around the impact of the coronavirus on the Group, it is not yet possible to assess with certainty the impact this will have on the Group's financial performance for the new financial year. As such, the Company is not giving any guidance for FY21 at this stage.