Update on business and operations
London, 11 March 2022 – Softline (LSE: SFTL), the Cyprus registered Global IT and digital transformation solutions provider headquartered in London and operating in almost 60 countries, announces the following updates.
Softline Holding plc began trading under the brand name Noventiq after divesting part of its business in October 2022.
As a result of the enhanced sanctions put in place to date around the world, Softline has undertaken a full review of the potential impacts on business operations from the changing regulatory environment, and the evolving vendor policies announced. The company continues to respect the laws and regulations in each country in which it operates, and has an unwavering commitment to vendor operating rules and practices.
Softline continues to expect no material impact on operations in the international business outside of Russia, which represents nearly 50% of overall turnover.
In the last two weeks, the company has experienced certain disruptions on day-to-day operations in Russia, including supply impacts, vendor restrictions, financial flows, and foreign exchange volatility. The company is proactively navigating the changing environment in Russia, and mitigating impacts where possible, and continuing to support customers with all of their technology needs as appropriate.
It is not possible to predict the progress or potential outcome of the situation in Ukraine, and developments in the region are beyond our control. Based on the increased uncertainty from the evolving regulatory environment and regional disruption, and the impact on its Russian subsidiary, Softline is withdrawing its FY21 (finishes March 31, 2022) guidance. Regarding Softline’s medium term outlook, it is too early to make any reasonable forecast for turnover and profitability for FY22. The company is yet to provide a detailed business outlook, and will make further announcements at the appropriate time.
Softline continues to have a very strong balance sheet, and there is no impact on the proceeds from the IPO, which are located outside of Russia. Softline continues to generate cash in local currencies of the countries where it operates, and is generally aligned with the cost base. Softline has a relatively low rouble exposure. The company remains focused on safety and liquidity of cash, and continues to have the necessary requirements for operations in each country. The company continues to expect to be able to manage the business efficiently in Russia.
Geographic expansion is one of the pillars of Softline’s 3D growth strategy, which is focused on emerging market expansion, as well as growth in Russia. The management changes outlined on March 4, 2022 were a natural step as the company executes on its growth strategy, and the board remains confident in the company’s long-term strategy, and positioning, as Softline continues to extend its position as a global leader in digital transformation solutions, platforms, and services.
The Group will continue to keep shareholders updated with further announcements as and when appropriate, and in line with its obligations.