Longino & Cardenal's net result negative in 1H20
Strong impact of Covid-19 on the company specialized in the distribution of high-end food
The Board of Directors of Longino & Cardenal, a company active in the research, selection and distribution of high-end food for national and international high-end catering, approved the Consolidated Financial Report at 30 June 2020, the results of which were impacted by the economic effects generated following the spread of the global Covid-19 pandemic. Revenues of the company, listed on the Aim segment of the Italian Stock Exchange, fell to Euro 7.3 million (compared to 15.7 million in the first half of 2019). A note from the company explains that "the trend in revenues was affected by the partial and then total blocks of activities imposed by the national authorities. During the lockdown period, L&C decided to evolve its business by adapting it to the current context and thus launched the digital e-commerce project which immediately showed a very positive response in terms of sales, also opening the product portfolio to the private consumer. Starting from the reopening of the activities, the Group has progressively resumed operations, finding an encouraging trend of progressive growth in the months following the lockdown ".
The EBITDA is negative for Euro 1.3 million, compared to Euro 0.6 million at 30 June 2019. Following the drastic reduction in sales activities, the management promptly took all suitable measures to contain overheads, intervening on all items for which it was possible to make a saving. The reduction in personnel costs took place through a considerable use of the holiday fund and the use of social safety nets. Commercial and marketing costs were also contained by virtue of the failure to organize promotional activities and events and the lack of costs associated with the travel of the employee sales force. EBIT it is negative for Euro 1.5 million compared to Euro 0.5 million at 30 June 2019, after provisions and depreciation of approximately Euro 0.2 million. The net result it is negative for Euro 1.4 million (Euro 0.3 million in the first half of 2019).
The Net Financial Position is equal to Euro 1.4 million of debt (cash of Euro 1.4 million at 31 December 2019). In order to strengthen cash and cash equivalents and meet its obligations, the management promptly resorted to credit by exploiting the subsidized instruments made available by the Liquidity Decree and the Central Guarantee Fund, and decided to suspend the dividend distribution resolution on earnings 2019.
Riccardo Uleri, CEO and majority shareholder of L&C, commented: "During the first half of the year, we promptly responded to the negative impacts of the pandemic, which had a significant impact on the catering business during the lockdown period, putting in place all the levers to guarantee the safety and protection of the health of employees, contain costs, safeguard the accounts and financial solidity. However, our approach was not exclusively "defensive" but rather we decided to invest by taking up the challenge of change and developing the e-commerce sales channel. The investment and implementation of an online purchasing platform not only allowed us to optimize the warehouse, but also gave us the opportunity to open a direct sales channel to the private consumer. We have also expanded the digital strategy also in organizational terms with a new ERP system for internal efficiency and better management of customers and suppliers. The relaxation of the restrictions imposed during the lockdown period, combined with the contribution of the online channel is progressively bringing sales back to pre-covid levels, and we are confident, in the absence of new relapses of the pandemic, that we can return in the second half of 2020 at positive levels of profitability ".
After the first six months of 2020, the Company also signed two loan agreements disbursed as part of the Liquidity Decree with a guarantee of 90% coverage by the Central Guarantee Fund, the first with Intesa San Paolo for a total of Euro 3 million with a duration of 72 months and amortization of 24 months, and the second with Deutsche Bank for Euro 1 million with a duration of 5 years and amortization of 12 months.
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