Companies slash dividends and cut costs in face of crisis

Developer St Modwen has placed a third of its workers in furlough and its board have taken a 20 per cent pay cut.

The developer, who has also axed its dividend, is one of a series of firms which has taken action to cut costs in the face of the Covid 19 crisis.

St Modwen says it has £169m of cash on a see-through basis, a low see-through LTV of 22.8% and no significant debt maturities until December 2023.

The firm has paused all housebuilding and on-site marketing activity by St Modwen Homes.

It has now placed just over 200 employees on furlough under the Coronavirus Job Retention Scheme.

At the same time the board has voluntarily agreed to take a 20% cut in pay and fees and axe its dividend.

Vimto maker Nichols is gearing itself up for a significant drop in revenues.

The Newton-le-Willows firm said it entered this financial year with a strong balance sheet, with more than £40m of cash and no debt.

However, the firm has taken the decision to cancel the final dividend announced on 26 February 2020 of 28 pence per share.

The move will save £10.4m over the seasonally critical spring and summer period.

Nichols is also taking steps to cut costs, including the re-evaluation of its marketing spend given the changed circumstances, postponing non-essential recruitment and suspending non-critical capital expenditure from the business.

John Nichols, Non-Executive Chairman, said: “Our first and most important objective remains to protect the health and wellbeing of our employees and customers.

“At this most challenging time, the Vimto family has once again demonstrated its values and commitment and I would like to wholeheartedly thank all our teams for their current and future efforts.

“With a heritage of 112 years, Nichols has successfully weathered significant challenges and changes across global markets before. Driven by the strength of the group’s brands, robust balance sheet and diversified business model, the board remains absolutely confident in Nichols’ ability to both manage the near term pressures impacting the global economy and emerge from this unprecedented period well-placed to continue to deliver the group’s long-term growth plans.”

Liverpool based Appreciate has also outlined cost cutting measures.

The financial services business has reduced discretionary expenditure, cancelled its interim dividend payment saving £2m and is reviewing bonuses.

It has closed all its offices and fulfilment locations as a result of the outbreak.

Ian O’Doherty, chief executive, said: “Over the last year we have made great progress against the strategic plan we outlined in December 2018, to build a robust and scalable platform for future growth. The steps already taken have better enabled us to respond well and quickly to this crisis.

“Despite the immediate challenges of this unprecedented situation, we are taking all necessary actions to mitigate any adverse impacts and the board remains confident that the group is well positioned for growth in the medium and long term.

“We will provide a further update by the end of April.”

Meanwhile marine engineering firm James Fisher has cancelled its annual general meeting.

The Cumbrian firm said it is no longer practical or desirable to hold the AGM in Barrow-in-Furness.