Kin + Carta gains financial headroom
Friday, July 24, 2020
Kin + Carta, formerly St Ives, is to defer some pension contributions until September because of the virus crisis.
The marketing services PLC exited print in 2018, but a number of industry employees and retired workers are still members of its old pension scheme, which was closed to new entrants in 2002.
In April the group said it was in discussions with the trustees of its legacy defined benefit pension scheme.
It has now confirmed that it agreed with the trustees to defer deficit repair contributions for five months, which began in April.
“We anticipate finalising a revised schedule of future contributions under the recovery plan by mid-September 2020,” Kin + Carta said.
The scheme’s recovery plan currently requires Kin + Carta to pay £3m of “cash deficit repair contributions” a year.
At the last valuation of the scheme in April 2016 it had a funding deficit of £42.8m.
Kin + Carta’s banks have also agreed to double the ceiling on its quarterly leverage covenant to up to five times EBITDA, for four quarters from the beginning of May onwards.
“This position provides significant headroom to the Company's base case forecasts and underpins the Company's confidence in its ability to trade through a further downturn if required,” the firm stated.
In a trading update, the £173m turnover group said the pandemic had “underlined” the market need for its digital capabilities.
“Whilst the pipeline has improved in the last 60 days, we expect the financial headwinds of the Covid-19 pandemic to continue into the first half of our next financial year, which starts on 1 August 2020.”
The group expects to announce its results for the financial year ending 31 July in November.