Footwear giant could cancel dividend payment as coronavirus hits retail sector

Leicester-headquartered footwear giant Shoe Zone has decided to defer paying its 2019 final dividend in light of the coronavirus crisis, and says the payment might end up being cancelled if the retail environment continues to be adversely affected.

The company was due to pay out 8p per share as agreed at its AGM earlier this month, but following consultation with its advisers, it has taken what it describes as the “prudent” decision to defer the payment.

The call has been unanimously backed by the Shoe Zone Board.

The firm now says it will convene another AGM in May, at which the cancellation of the dividend payment will be proposed.

In a statement to the London Stock Exchange, Shoe Zone said: “In recent days we have seen a reduction in footfall, across our estate, and whilst the full extent of the coronavirus on the short and medium term retail environment is not yet clear, it is becoming ever more apparent that it will create significant disruption to people’s lives and shopping habits in the coming months.

“The decision to defer and take steps to propose the cancellation of the 2019 final dividend has been taken with the unanimous backing of the Board and is one of number of appropriate measures being implemented to conserve the company’s cash balances and ensure the robustness of the business to protect it from a sustained period of challenging trading.”

In January, the company reported that its underlying pre-tax profits had decreased from £11.3 million to £9.6 million.

At the time, chief executive Anthony Smith was keen to dismiss “doomsayers” forecasting the death of the UK high street.