Adept Chairman Ian Fishwick has pinned post Covid-19 profitability hopes on the firm's 75% recurring revenue ratio, a mix of public and private sector business and minimal capital expenditure.
“We will use all the tools available to us to reduce cost and cash outflows where appropriate, including pausing any acquisition activity, a pay and recruitment freeze and a replacement of overtime payments with time off in lieu,” he said as the AIM-listed firm reported sales up 19% and EBITDA rising 13% year-on-year for its year ending 31st March 2020.
Turnover is roughly 45% public sector across the NHS, education and Government, and 55% commercial.
Net debt of £28m at year-end is £3m below market expectations, said Fishwick, primarily as a result of a share placing in February 2020.
“Given the current economic uncertainty due to Covid-19 it is possible that we may not pay a final dividend in respect of the year ending 31st March 2020,” added Fishwick.
He noted that Adept has witnessed another strong year with geographic expansion in Yorkshire.
The acquisition of Advanced Computer Systems in Doncaster saw the previous acquisition of ETS in Wakefield integrated into the Doncaster office.
Following the escalation of the coronavirus crisis the company conducted several stress test scenarios to understand the potential impact on sales revenue, profitability and cash position over the coming year.
“Our stress tests assume that the next six months will see the most significant impact after which the Covid-19 outbreak will start to be under control,” Fishwick said.