18th Mar 2019 13:38
LONDON (Alliance News) - Professional services firm WYG PLC on Monday cancelled its dividend after a difficult final quarter and has secured a waiver for the covenants on its bank loans.
Shares in WYG were up 4.9% at 16.00 pence on Monday.
The 0.6p per share dividend was declared on December 4 and was due to be paid on April 4. However, the company has decided to cancel the dividend and instead to "focus on managing its balance sheet".
In February, the company also announced that, on the back of a "challenging trading environment" in the fourth quarter of its financial year, it would not meet either its net debt to earnings before interest, taxation, depreciation, and amortization or interest cover covenant tests within its loan agreements on March 31.
At that time, WYG said it had begun discussions to secure a waiver of these covenant tests. This has now been achieved, and WYG is now in "constructive discussions" relating to the covenant structure of its bank facilities.
WYG Chief Executive Douglas McCormick said: "As explained in our update in February, trading conditions have been unusually challenging in the final quarter of our current financial year and this waiver together with the cancellation of the dividend will provide us with the flexibility to manage the company's balance sheet in the near term.
"Our recent discussions with the bank have been productive, giving us an opportunity to explain our confidence in, and outlook for, the business as well as outlining the proactive measures being taken by the Board to reduce our cost base."