30th Mar 2020 11:33
(Alliance News) - Greencore Group PLC said Monday it is cancelling its interim dividend to focus on cash preservation during the Covid-19 outbreak.
Shares in the Irish sandwich manufacturer were down 6.9% in London on Monday at 159.25 pence each.
Greencore noted consumer demand has "changed rapidly" in the past couple of weeks following the UK Government's escalating measure to handle the spread of the virus.
"There has been a marked reduction in demand for the group's food to go categories in grocery retail, which has been partly offset by the sustained volume growth in the group's other convenience categories," the company added.
As a result, Greencore is also withdrawing its 2020 guidance.
Greencore said it is taking "prudent" measures to protect profitability and cashflow - including cutting its dividend.
"Firstly, the group is tightening its food to go production network and furloughing impacted colleagues, using the government's Coronavirus Job Retention Scheme. The group is also working to eliminate non-essential operating costs," Greencore said.
The company's board and executive directors have also taken a 30% pay cut for 3 months.
Greencore said it will continue to focus on its balance sheet and liquidity.
It will defer a substantial portion of previously planned capital expenditure, the company said.
Greencore said it retains "substantial and increased" financial headroom, with cash and undrawn committed bank facilities of approximately GBP265 million at March 27. This includes a newly agreed additional GBP75 million committed debt facility which matures in March 2021.
By Paul McGowan; [email protected]
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