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Immotion begins cost reduction measures to preserve cash amid coronavirus outbreak

Despite a reduction in attendees to its sites over the last few days, the VR firm said a return to normalcy by July will see “a quick recovery in trading”

Immotion Group - Immotion begins cost reduction measures to preserve cash amid coronavirus outbreak

Immotion Group PLC (LON:IMMO) has said it is reducing operating costs and has “a healthy cash balance” as it joins other firms in supporting itself against the effects of the coronavirus outbreak.

In an update on Tuesday afternoon, the virtual reality (VR) firm said over the last few days trading at a number of its sites had been “significantly impacted” as attendee numbers fell and a number of its partners reduced opening hours or, in some cases, closed.

READ: Immotion rises as CEO says it is ‘well placed’ to deal with coronavirus outbreak

As a consequence, Immotion said it will see a “substantial reduction in revenue and contribution from these sites” which will, in the short term, affect its ability to reach its targeted monthly breakeven.

The company added that if the situation continues or worsens, it is likely to “impact significantly” on its full year numbers.

However, Immotion said the demand for its products from potential partners “remains high” with a number of Zoos wanting installations of its ‘out of home’ VR experiences for the summer period.

The group also said a “significant element” of its revenue was made during the summer school holidays, and that a return to normal service by July is expected to see “a quick recovery in trading”.

Immotion added that it is currently continuing new installations where possible, with a 36-VR theatre currently being constructed at the Shark Reef Aquarium at Mandalay Bay, Las Vegas.

“We are confident in our business model and demand remains strong but we are, unfortunately to a large extent at the mercy of events", said Immotion chief executive Martin Higginson.

"Many of our partners are looking to install in early June for the summer period. As with many leisure businesses, a significant proportion of our revenues are generated during holiday periods; as such we hope the current situation will, as it is in China, be under greater control by then and some normality will have returned", he added.

Quick facts: Immotion Group

Price: 2.68 GBX

AIM:IMMO
Market: AIM
Market Cap: £10.17 m
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