The Accell Group has today issued a financial update detailing the early known impacts of the Coronavirus on its supply and revenues attached.
With the lockdown picture variable across the market’s served by the group, revenue for March and April measured 27% lower compared to last year, something that was attributed to shop closures. By the end of April many stores began to reopen in Germany, the firm’s largest market and by the second week of May the ‘majority’ of the distributor’s customers were back serving their own clients in some form.
That meant that May demonstrated the first real sign of the ‘bike boom’ that has been reported in many markets around the globe; sales revenue shot up by 23% against last year’s tally. That meant that year to date totals came in just 5% down, with a reasonable expectation that things will improve up to the present time.
However, the group’s costs were higher thanks to disruption in the supply chain and year to date EBIT measured 40% lower than this time last year, down to €28 million.
In order to bolster the business in the event of further disruption, or the much feared second wave that appears to be gaining traction in some parts of the world, Accell has secured access to liquidity over a two-year stint, gaining access to a bank facility with €115 set aside to help the group ride any further storms.
Production levels are currently operating at about 70 yo 80% of capacity, with caution still very much applied to social distancing within the business. Back in March just 30% of the production was operational.
Ton Anbeek, CEO Accell Group: “The strong recovery of bike sales in May is clearly a very positive development, yet we are still trailing behind last year’s numbers. The duration and impact of COVID-19 currently remains unpredictable and we anticipate that our 2020 results will be hampered by the ongoing disruptions in the global supply chain. The current uncertain environment requires us to be more prudent and this is also why we are glad to have improved our financial buffer. At the same time we are excited to see so many European governments, cities and consumers embrace cycling post lock down, which contributes to a bright future for our brands and our business in the post-COVID-19 era.”
The business is now benefiting from an improved cash position on the back of a spike in demand.
Meanwhile, dividend payments remain suspended for the remainder of 2020 and will be limited for as long as Accell is drawing from its aforementioned credit line.
“In addition, regarding the existing facilities provided by our bank consortium we have agreed amended terms for amongst others the financial covenants and availability of the seasonal RCF (extending the seasonal facility from 15th of July till 1st of December 2020),” added the statement.