REACTing to increased demand caused by COVID-19
The (AIM: REAT ) has announced they are experiencing a period of high demand to provide decontamination and infection control services for premises thought to be harbouring COVID-19.
The Company’s proprietary components and methodologies eliminates all traces of the virus and can provide ATP testing to confirm and certify a site is clear for safe operational use.
Capacity has been expanded to support demand through cross training, partnerships and sub-contracting with smaller specialist cleaning operators with all specialist cleaning operators are equipped beyond recommended standards to ensure their health and safety.
The Company has entered into a number of agreements with Tier 1 Customers to provide a 'first-response' service to support multiple premises in England and Wales. Although demand is likely to decrease over the next few weeks as the impact of the lock-down reduces incidents requiring remedial action, the Company believe demand will increase again as the country returns to some form of normality.
Current Trading ahead of management expectations
Due to the increase in recent trading, the Company now expects to deliver a small operating profit in the six months to 31 March 2020, ahead of expectations and putting the Company in a good position to meet or exceed management expectations for the full year.
Strengthened balance Sheet
The (unaudited) cash balances as at 31 March 2020 was c.£306,000, which only included one week's payment from the c. £0.5 million Tier 1 Customer contract announced on 23 January 2020. From this point forward remittances from this Contract are now issued weekly to contribute positively to the Company's cash position.
In addition, REACT has negotiated with a bank an initial line of credit of £225,000 on favourable terms secured through invoice discounting.
These actions put the Company is a strong position to support its growth.
Share in React unchanged in early morning trading
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