31st Mar 2020 10:22
(Alliance News) - Morgan Advanced Materials PLC on Tuesday said it will not be paying a proposed final dividend for 2019 as its sales declined amid coronavirus.
The specialist products manufacturer said it has wound down non-essential operations and closed sites in geographies where required.
Elsewhere - in healthcare, food production, energy and critical infrastructure - Morgan said it is continuing operations with heightened safety measures where appropriate.
Sales for the 12 weeks to March 21 were 3.2% lower year-on-year, on an organic constant-currency basis, the FTSE 250-listed company said. Excluding China, sales were 0.2% lower than the prior year.
Morgan said it is seeing improvements in China, with all of its factories there reopening. However, the Covid-19 outbreak has escalated globally. As of Tuesday, the company said it has six businesses closed across Italy, India and South Africa.
Therefore, the company has withdrew its previous guidance for 2020.
Morgan said it is taking actions to reduce costs and improve cash flow and liquidity. These include reductions to capital expenditure other than for vital health, safety and environmental matters, a temporary hiring freeze for all but the most critical roles, and a curtailment of discretionary expenditure. The board members have agreed to a 30% salary reduction, effective Wednesday, for the rest of 2020.
In addition, the company said it will not be paying a the proposed 2019 final dividend and the distribution payable on the preference shares.
Morgan shares were trading marginally lower in London on Tuesday at 189.08 pence each.
By Evelina Grecenko; [email protected]
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