Sections

ideals
Business Essentials for Professionals



Coronavirus Pandemic Prompts Over 1000 UK Forms To Halt Dividend Payments


03/29/2020


Coronavirus Pandemic Prompts Over 1000 UK Forms To Halt Dividend Payments
The rapid and devastating spread of the coronavirus pandemic in the United Kingdom has forced the government to impose a lock down in most parts of the country and shut down factories to combat the spread of the pandemic. As such companies are now focusing on conserving cash which has forced more than 100 British companies to either postpone or cancel dividend payments altogether.
 
A total of 4.2 billion pounds ($5.2 billion) of dividend payments have been halted in March alone by retailers, house builders and telecoms firms as well as others in plenty of other sectors, showed data from the investment firm AJ Bell that was released on Friday.
 
Plummeting of demand from new buyers for homes had resulted in construction projects being shut down hat has impacted real estate companies. A total of 1.24 billion pounds in dividends have been halted by just two real estate companies -- Persimmon and Taylor Wimpey.
 
In more recent times, the sector has been hit during the coronavirus pandemic as the British government asked people not to shift homes and advised construction companies to stop all non-essential construction work in the country.
 
While real estate company Wimpey cancelled its final and special dividends for 2020 worth 485.7 million pounds, its peer Persimmon postponed dividend payment of 751.8 million pounds. The two combined total of the two companies was at 485.7 million pounds.
 
And after the virus pandemic severely impacted the advertising revenues as well as forced halting of production of its top soap operas "Coronation Street" and "Emmerdale", broadcaster ITV also decided no tot make dividend payments, the largest commercial free-to-air broadcaster of the country said in a statement earlier.
 
2019-20 final dividend was also halted by retailer Marks & Spencer as the company said that it was no longer possible for it to provide any form of guidance that can be meaningful about its likely earnings for 2020-21 since it had closed down its stores.
 
According to AJ Bell, so far this month only nine companies have announced dividends in the country which includes the utility firm SSE and Coca Cola HBC AG but even they were not straight forward.
 
For example, the timing for the payment of the full-year dividend of 80 pence per share for 2019-20 could be changed depending on how the impact of the coronavirus pandemic evolves, said SSE. And its guidance for the current financial year was withdrawn by Coca Cola, among others, because of the coronavirus pandemic.
 
Payment of dividends would be allowed to be delayed by 30 days the companies listed on the London Stock Exchange to account for the disruptions caused due to the virus pandemic, the LSE said on Wednesday.
 
(Source:www.nytimes.com)