Bonhill Group plc
("Bonhill", the "Company" or the "Group")
Bonhill Group plc (AIM: BONH), a leading B2B media business specialising in three key areas: Business Insight, Events and Data & Analytics, provides the following update on the impact of the COVID-19 virus, protective and proactive actions being taken, current trading and outlook.
The COVID-19 pandemic is causing significant disruption to the Financial Services, Technology and Diversity communities that we serve in our four key geographies, being the UK, Europe, North America and Asia. We have been managing the impact of the virus on our business in Asia since earlier this year which has proven beneficial in our ability to manage the recent rapid escalation of COVID-19 in those other regions.
Our overriding concern is the health, safety and wellbeing of our employees, clients and partners. We are complying with all relevant government recommendations globally and our staff are successfully working remotely, made possible by their flexible and positive attitude and our investment in a robust technology platform over the past year. We would like to thank them for their support in this current climate.
In light of recent developments and the conditions in which the Group is now operating, the Board provides the following update:
· At the end of 2019, approximately 40 per cent. of the Group's revenue (£24.2m) was derived from events activity across our four key geographies.
· As announced in its trading update released on 20 January 2020, the Company started 2020 well with particularly strong forward bookings in the UK and US following the decisive UK General Election result, greater clarity on Brexit and the well-publicised issues in UK fund management caused by a high-profile fund failure.
· In 2020, we have run 16 events, but as the impact of COVID-19 has increased this has scaled down, particularly this month, and we have no events scheduled until May 2020 at the earliest.
· The vast majority of our UK, US, European and Asian events have been postponed until May 2020 at the earliest or more commonly to the third and fourth quarters of 2020; specifically the events deferred to the second half were expected to generate total revenues of £5.0m, comprising approximately £1.8m in the US, £1.7m in the UK, £1.2m in Europe and £0.3m in Asia.
· A very small number of events generating a total revenue of approximately £0.2m have been cancelled but are expected to return in 2021.
· The impact of the various postponed and cancelled events will vary by geography, but the Company will incur one-off cancellation fees of approximately £0.3m.
· The combined impact of COVID-19 on our events business will be to lower expected revenue by £5.2m and gross profit by £3.1m for the first half of the Company's financial year ending 31 December 2020 ("FY2020"). As previously described, revenues of £5.0m have been postponed until the second half of FY2020.
· Three events have been moved to a webinar format which have been well received by clients who seek to maintain dialogue with their core community. More events will utilise webinar formats if appropriate.
· We have seen a surge of interest in our Small Business offering (www.smallbusiness.co.uk). It had already been performing ahead of budget in the year to date and has seen a five-fold increase in traffic on a daily basis, with March 18 2020 showing over 250,000 visitors generating 360,000 page views, which is a reflection of the need for information in uncertain times by a core community and the role we play in supporting those communities.
· Last year, we made annualised cost savings of £1.5m and in response to COVID-19 we have had to undertake further significant cost savings across the Group resulting in a 15 per cent. reduction in roles in the UK and European businesses. This will result in further annualised savings of £1.5m. The Group now operates in one site in the UK and has the benefit of shared, IT, Finance, marketing and event operations services.
· Across the Group, costs are being tightly managed, and we are taking actions to conserve cash. As at 20 March 2020, the Group had a total cash balance of £1.6m and a vendor loan of $3.1 million repayable in monthly instalments until August 2021.
Other than those referred to above, all of our remaining events are currently expected to go ahead as planned in Q3 or Q4 2020. The situation is evolving on a daily basis, and we will continue to work hard to mitigate the impact that the outbreak is having on the Company. We would like to thank all of our sponsors, suppliers and delegates for their support.
Outlook, dividend and 2019 full year results
The COVID-19 crisis began in Asia at the start of the Company's financial year and its impact is only now being fully felt across the Company's other three key geographies. It is too early to judge its impact on FY2020 with any degree of certainty. As a result, it is no longer possible for the Board to provide financial guidance for FY2020.
Given the lack of certainty on the outcome of FY2020 and our actions to conserve cash, the Board is suspending dividend payments until the outlook is clearer and more normal trading conditions have resumed. In the short term, the Board will consult with and update shareholders following release of the Company's unaudited results for the year ended 31 December 2019, which are expected to be announced tomorrow, 24 March 2020, and seek to explore the various support measures recently proposed by the UK Government.
Simon Stilwell, Chief Executive of Bonhill, said:
"COVID-19 has had an unprecedented impact on the global community, as all businesses are being forced to rapidly adapt to overcome this crisis. The Board has taken swift action to protect shareholder value by conserving cash, improving liquidity and reducing costs through headcount reductions.
Our brands serve communities and play an important role in connecting people and enabling business. We are using all appropriate methods to continue this vital engagement and help our clients to stay close to their communities.
Like others, we do not know how long this pandemic will last. However, we are well-positioned to respond quickly when the end is in sight, for there will be no greater business need for events, forums and networking than when we emerge from this global crisis."
For further enquiries please contact:
Bonhill Group plc
Simon Stilwell, Chief Executive
David Brown, Group Finance Director
+44 (0)20 7250 7035
Shore Capital (Nominated Adviser and Joint Broker)
Tom Griffiths/David Coaten (Corporate Advisory)
Fiona Conroy (Corporate Broking)
+44 (0)20 7408 4050
Canaccord Genuity Limited (Joint Broker)
+44 (0)20 7523 8000
Houston (PR Adviser)
+44 (0)20 3701 7660
About Bonhill Group plc
Bonhill Group plc is a leading, AIM-quoted, B2B media company providing Business Insight, Events and Data & Analytics propositions to Financial Services, Diversity and Technology business communities in 25 countries. Bonhill operates fifteen information websites, publishes four regular print titles, hosts 120 events per annum, offers a portfolio of data & analytics propositions and provides a range of content marketing solutions.
The business creates content, sales and marketing opportunities, networking events and transactional opportunities for its audiences of entrepreneurs, business owners and managers, CTOs & technology leaders, asset & wealth managers, and professional women, in addition to its sponsors, advertising clients and customers. Flagship brands include: InvestmentNews, Portfolio Adviser, Fund Selector Asia, What Investment, SmallBusiness.co.uk, GrowthBusiness.co.uk, Information Age, Women in… events series, and DiversityQ.
For more information visit www.bonhillplc.com