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Tue 7th Apr 2020 - Update: Cineworld and Adnams
Cineworld – all 787 cinemas now closed: Cineworld has reported that its entire estate of 787 cinemas in ten countries has been closed as a result of covid-19, ‘a situation impossible to imagine a few months ago’. The company added: “This has obviously been extremely challenging in many respects and our first priority has been the health and safety of our customers, employees and other stakeholders. Every effort is being made to mitigate the effect of the closures, to assist our employees and to preserve cash. These efforts include discussions with our landlords, the film studios and major suppliers, as well as curtailing all currently unnecessary capital expenditure. This is a painful but necessary process as before the onslaught of the covid-19 virus, we were excited and confident about the group’s future prospects. We are also discussing the group’s ongoing liquidity requirements with our RCF banks. We welcome the emergency support programmes to protect jobs and business that have been announced in our markets and will access them as appropriate. We continue to monitor progress of the group’s proposed acquisition of Cineplex, Inc. Given the importance of conserving cash wherever possible, the board has decided to suspend payment of the 2019 fourth quarter dividend of 4.25c per share and upcoming 2020 quarterly dividends. The board will keep this position under review. Until there is greater clarity on the prevailing circumstances and given the impact of covid-19 on many of our employees, the executive directors have voluntarily agreed to defer payment of their full salaries and any bonuses to which they are entitled. Similarly, during this period the non-executive directors will defer their fees. With very few exceptions, the good relationships we have built up over the years have been supportive and understanding of our efforts and, together with us, our industry partners look forward to the time when we shall again be able to open our doors and provide entertainment and pleasure to our customers.”

Adnams updates on covid-19 impact: Adnams, the Suffolk brewer, distiller and retailer, has provided an update on the impact of covid-19 on its business. The company stated: “Since the covid-19 pandemic, Adnams has been faced with the closure of most of its key customers and all of its own pubs. We have also taken the decision to close our shops. Our operations are currently limited to our take home business, primarily supplying supermarkets with beer and spirits, and our online and mail order sales. We have reduced costs to a minimum and have reduced staffing to approaching 10% of normal levels, with directors and our senior team taking a 50% pay cut. It is not possible at this time to predict the full impact on our revenues, and whilst Adnams entered 2020 with gearing levels higher than we have normally had, after a period of substantial investment, we are managing our costs very closely and have adequate headroom in our facilities at the present time. We were already is discussion with our bankers regarding new facilities and our bank has remained positive and supportive. We have a largely freehold property estate, which we have not revalued, meaning that we have substantial unrecognised value in our balance sheet. Specific actions that we have taken include: We have stopped all but essential spending of both a revenue and a capital nature. The large majority of our employees have been placed on furlough further to the government’s job retention scheme. Many others are on reduced pay. Our culture has meant that our staff have responded positively to these decisions and they look forward to returning to work with us once the crisis has passed. There will be no final 2019 dividend. Adnams is a values-led business that has always focused on the long term. We have continued to support our community, including having our distillery produce alcohol for hand sanitizer, and as we approach our 150th anniversary in 2022 we believe that we remain well placed in these uncertain times.”

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