10th Jul 2020 10:25
(Alliance News) - Samuel Heath & Sons PLC on Friday said it will not pay a final dividend for financial 2020 due to forecasts for the year ahead showing a large negative effect on cash flow.
Shares in the home fittings manufacturer were trading 7.0% lower at 200 pence each on Friday morning in London.
For its financial year ended March 31, Samuel Heath posted revenue of GBP13.9 million, unchanged from the prior year. Pretax profit was GBP1.4 million, up from GBP882,000.
Looking ahead, the Birmingham-based company said its expects downturn in activity that resulted from closures amid the pandemic to have a "devastating effect" on its profitability in financial 2020 as output to the end of June was 38% down year-on-year.
It added that it therefore does not intend to pay a final dividend, taking its total dividend payout to 5.5 pence paid for the interim period. For comparison, for financial 2019, a final dividend of 6.875p was paid taking the total to 12.375p.
"Extensive work has been done on a wide range of forecast scenarios for the current financial year. What they all show is a large negative effect on cash flow, not helped by us continuing to fund the large deficit in our pension scheme. With this in mind, the board does not believe that this is the correct time to pay a final dividend, even though our balance sheet is strong. We will revisit this decision at the time of the Interim announcement," said Chair Sam Heath.
As at the end of March, Samuel Heath had cash of GBP3.0 million.
By Ife Taiwo; [email protected].
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