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Nichols cancels dividend, expects 'significant' impact from Covid-19
31st Mar 2020 08:08
(Sharecast News) - Soft drinks maker Nichols cancelled its final dividend on Tuesday as it said the coronavirus is expected to have a "significant" impact on its 2020 performance.
The company said trading in the first two months of the financial year was in line with management's expectations. "However, as a result of the Covid-19 pandemic and the restriction of movement of people worldwide, the board now expects a significant impact on the group's financial performance in 2020."
As a result, the Vimto maker said it is unable to provide financial guidance for the year ended 31 December 2020 and it is cancelling the 28p a share final dividend that was announced in February.
This decision will conserve £10.4m of cash over the seasonally critical spring and summer period, it said, adding that the board will consider the cash position once through "this critical trading period".
Nichols said it is taking steps to remove cost, including the re-evaluation of its marketing spend given the changed circumstances, postponing non-essential recruitment and suspending non-critical capital expenditure from the business.
Non-executive chairman John Nichols said: "With a heritage of 112 years, Nichols has successfully weathered significant challenges and changes across global markets before.
"Driven by the strength of the group's brands, robust balance sheet and diversified business model, the board remains absolutely confident in Nichols' ability to both manage the near term pressures impacting the global economy and emerge from this unprecedented period well-placed to continue to deliver the group's long-term growth plans."
The company said trading in the first two months of the financial year was in line with management's expectations. "However, as a result of the Covid-19 pandemic and the restriction of movement of people worldwide, the board now expects a significant impact on the group's financial performance in 2020."
As a result, the Vimto maker said it is unable to provide financial guidance for the year ended 31 December 2020 and it is cancelling the 28p a share final dividend that was announced in February.
This decision will conserve £10.4m of cash over the seasonally critical spring and summer period, it said, adding that the board will consider the cash position once through "this critical trading period".
Nichols said it is taking steps to remove cost, including the re-evaluation of its marketing spend given the changed circumstances, postponing non-essential recruitment and suspending non-critical capital expenditure from the business.
Non-executive chairman John Nichols said: "With a heritage of 112 years, Nichols has successfully weathered significant challenges and changes across global markets before.
"Driven by the strength of the group's brands, robust balance sheet and diversified business model, the board remains absolutely confident in Nichols' ability to both manage the near term pressures impacting the global economy and emerge from this unprecedented period well-placed to continue to deliver the group's long-term growth plans."