Impact of COVID-19 on Trading Activity – cost reduction measures implemented
Adslot has today updated the market on the impact of COVID-19 on its business operations. The Company has also announced a number of cost reduction measures to preserve operating cash runway.
- We have observed a moderate fall in trading activity in the UK and European markets due to COVID-19;
- Trading activity in the US market has increased this month, but coming off a low base;
- Cadreon and other agency activations in the US still continue as planned, but are being implemented via remote methods;
- We anticipate a moderate reduction in the value of media traded on Adslot Media this current quarter;
- We still anticipate the value of media traded will grow in the June 2020 quarter due to recent and imminent agency activation.
- Licence Fees are fixed and will not be impacted by a reduction in trading activity, but we expect these to remain flat in the current half.
- We have implemented cost reductions in the business that equate to $4.0M on an annualised basis.
- These reductions include:
- A 28% reduction in head count across the business, the majority of which is made up of external development contractors;
- For the remainder of FY20:
- The Executive Chairman will take no director’s fees or consulting fees;
- All non-executive directors will take no director’s fees;
- The CEO and CFO will take a 20% reduction in salaries;
- No quarterly or annual bonuses will be paid;
- Cost savings across senior exec team, including salary cuts, working part time and use of annual leave.
Full details of additional cost reductions are provided in the ASX Release available by clicking here.
In these uncertain times, the Board and Management felt strongly that this was the right thing to do to ensure sustainability of the business for all shareholders and employees. We still remain optimistic about the Company’s prospects, especially in the US market under the leadership of Chris Maher, who continues to make progress with agency activation in spite of the challenging environment.
As this is a fluid, unprecedented and fast-changing environment, we will continue to monitor, assess and adopt as required to ensure the safety of our employees and the protection of our shareholders’ interests.
Founder & Executive Chairman