25th Mar 2020 07:36
(Alliance News) - Persimmon PLC on Wednesday said it will cancel its interim dividend and postpone the payment of its final distribution in preparation for completions delays, cancellations and a slowdown in new sales due to the virus outbreak.
The FTSE 100-listed housebuilder said it has closely followed Public Health England's guidance since the outbreak of the virus in the UK.
Persimmon said it will be closing all of its sales offices from Thursday until further notice.
The move follows UK Prime Minister Boris Johnson's decision to place the UK on lockdown to tackle the coronavirus.
Persimmon said its construction sites are commencing an orderly shutdown with only essential work taking place. This will be focused on making partly built homes safe and secure and where failure to complete the build could put customers in a vulnerable position.
The York-based company said it entered this "period of uncertainty" with a robust operational performance in the year to date and a strong forward order book.
Persimmon entered 2020 with a strong balance sheet, it said, including cash holdings of GBP844 million, land creditors of GBP435 million and land holdings of 93,246 plots owned and under control.
The company said its current cash position stands at GBP610 million as of Friday last week.
However, Persimmon is now preparing for a "significant" delay in the timing of legal completions, a rise in cancellation rates, and a material slowdown in new sales.
Looking forward, Persimmon said conserving cash and maximising financial flexibility is in the long term best interests of the business and all its stakeholders.
Thus, the company said it has decided to cancel the proposed 125 pence per share interim dividend payment, which was expected to be paid on Thursday next week.
In addition, Persimmon said it will postpone the proposed final dividend payment of 110p per share, which was expected to be paid on July 6.
"The group's long-term strategy of minimising financial risk and maintaining capital discipline over the long term through the housing cycle, ensures that we are well placed as we enter this period of uncertainty," said Chief Executive Dave Jenkinson.
"Whilst the impacts of this pandemic go beyond the normal cyclical nature of the housing market, the group's high quality land holdings, significant liquidity and strong balance sheet will allow us to work through these challenges and emerge in a strong position for the benefit of all our stakeholders," added Jenkinson.
By Evelina Grecenko; [email protected]
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