The company has passed on paying the final dividend in light of the uncertainties, something it had already trailed in a March trading update. The shares rallied 4.6% higher to 111.5p.
Around half of the firm’s clients operate in the hospitality sector which has seen business come to a halt as a result of the lockdowns.
However the supermarkets and hospitals have been operating more normally, while some restaurants have continued with delivery services, meaning that kitchens remain open.
The franchised model operated in the US (45% of revenues) and Europe (2% of revenues) provides some flexibility on costs as franchisees absorb the direct costs of running the business. However, the firm has reduced monthly fees by 50% and postponed mandatory purchases of filters.
In the UK which represents 53% of revenue and where it operates a direct model, the company has utilized the furlough scheme for 80% of staff as well as reducing salaries by 20% for the remaining employees, while board members have taken a 50% cut to fees.
Revised payment terms have been agreed with major suppliers, ensuring they remain supportive on a return to normal business. Fewer than 30 employees are needed to support the US franchise network.
During May the company received £0.2m from the US government's Paycheck Protection Programme as well as accessing £1.2m of funding through the UK’s coronavirus loan scheme. As of 26 May the group had in excess of £3.7m of cash and an undrawn £0.4m overdraft.
LIGHT AT THE END OF THE TUNNEL
Looking forward, business in the US has picked up in the last couple of weeks as 48 states have now eased lockdowns. With unemployment levels rising in the US, the company is also seeing a renewed interest from potential franchisees which bode well as more parts of the economy open up.
The firm has been busy during lockdown looking at different solutions to help clients reopen safely and recently launched the FiltaShield service. This comprises a 30-day protective disinfectant barrier on surfaces against coronavirus and a temperature monitoring technology which can scan up to 30 people a second to see if they have a high temperature.