First-Quarter Trading and COVID-19 Update

30 April 2020

FDM Group (Holdings) plc ("FDM Group" or "the Group")

First-Quarter Trading and COVID-19 Update

FDM Group today issues a first-quarter trading and Covid-19 update.

First-Quarter Trading

Trading in the first quarter was in line with the Board's expectations, the period having been only marginally impacted by the national lockdowns in the territories in which we operate. Revenues for the quarter were £71.0m (Q1 2019: £67.2m). The number of Mounties placed with clients currently stands at 3,802 (AGM, 25 April 2019: 3,848 Mounties; Y/E 2019: 3,924 Mounties).

The Group's balance sheet remains strong with £44.3m of cash and no debt as at 31 March 2020 (compared with £37.0m of cash at 31 December 2019 and £37.0m of cash at 31 March 2019).

COVID-19

As we indicated at the end of March, the significant majority of our Mounties are working remotely, continuing their client placements with revenue-generating work. We continue to recruit, albeit at reduced levels, and the number of applicants to our Academies remains encouraging. Our business continuity plans have enabled us to move quickly to use our technology so that our recruitment processes and Academies in all our territories, which are now operating remotely, are performing efficiently and effectively.

Whilst Mountie headcount has been relatively resilient to date, post-lockdown a number of Mounties have had their placements terminated early by clients operating in some of the sectors most badly affected by COVID-19. We have also been experiencing a reduction in the weekly number of new deals, and some of our clients have needed additional time for the remote on-boarding of Mounties to new placements. Whilst we have taken action to mitigate the adverse impacts of the pandemic on our business, at present we have no intention of accessing the UK Government furlough scheme or of reducing pay for employees.

As at today's date it is not possible to estimate with any degree of precision the extent of the impact on the Group's earnings in 2020 arising from the COVID-19 pandemic. However, we have modelled a number of potential scenarios and possible outcomes, including some which are significantly more severe than we reasonably expect to see given our experience at this stage. In all of these scenarios, the Group maintains a robust balance sheet and remains profitable, although below the Board's earlier expectations, and cash generative.

The Board believes that our agile and resilient business model positions us well to take advantage of opportunities as more normal conditions return, giving us confidence in the long-term prospects for the Group.

The Group continues to monitor the situation carefully and will provide further updates when we have greater clarity over the impact of COVID-19, including at the time of this year's AGM and the publication in July of the interim results. 

Rod Flavell, Chief Executive Officer, said,

"Our primary responsibility in the face of COVID-19 is the health and well-being of our staff, clients and other stakeholders. While uncertainty over the duration and impact of the Coronavirus pandemic makes accurate short-term forecasts difficult, our agile and resilient business model, supported by a robust  balance sheet, positions us well to face current conditions and the Group's long-term prospects remain strong."

This announcement contains information that qualified, or may have qualified, as inside information for the purposes of Article 17 of the Market Abuse Regulations (EU) 596/2014 (MAR). Figures shown in this announcement are preliminary and are unaudited.

This announcement also contains statements which constitute 'forward-looking statements'. Although FDM Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

ENDS

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About FDM

FDM's mission is to bring people and technology together, creating and inspiring exciting careers that shape our digital future.

The Group's principal business activities involve recruiting, training and deploying its own permanent IT and business consultants (Mounties) at client sites. FDM specialises in a range of technical and business disciplines including Development, Testing, IT Service Management, Project Management Office, Data Services, Business Analysis, Business Intelligence, Cyber Security and Robotic Process Automation.

The FDM Careers Programme bridges the gap for graduates, ex-Forces and returners to work, providing them with the training and experience required to successfully launch or re-launch their career. FDM has dedicated training centres and sales operations located in London, Leeds, Glasgow, New York NY, Herndon VA, Charlotte NC, Austin TX, Toronto, Frankfurt, Singapore, Hong Kong and Sydney. FDM also operates in Ireland, France, Switzerland, Austria, Denmark, Spain, Luxembourg, the Netherlands, China and South Africa.

FDM is a strong advocate of diversity and inclusion in the workplace, with over 85 nationalities working together as a team. The UK business' Gender Pay Gap Report 2019 showed a median pay gap of -1.7%.