Bunzl cancels final dividend amid coronavirus slowdown
UK distribution firm Bunzl has said it will not propose a final dividend for 2019 as it adjusts to a market heavily disrupted by coronavirus, sending its shares lower in morning trading.
The firm said “it intends to consider the appropriateness, quantum and timing of an additional interim dividend payment” for 2019 when some clarity around coronavirus emerges.
Bunzl, which provides products for the grocery, foodservice, cleaning, and safety industries, said trading up until 28 March had been relatively strong. It said revenue increased approximately 4.5 per cent.
Yet the firm’s chief executive Frank van Zanten said: “The ongoing uncertainty and headwinds presented by the Covid-19 outbreak mean we have a significantly more challenging near-term trading outlook.”
It said its business with food and retail companies is likely to be damaged by coronavirus, which has led firms to close their doors until the outbreak passes.
Bunzl added that “it is not possible to assess with certainty the impact this will have on the Group’s financial performance for the year”. Bunzl therefore withdrew its previous outlook but provided no new guidance.
Shares in the firm were 1.2 per cent lower in morning trading at 1,532.5p.
Among other announcements, Bunzl said its board, executive committee, and managing directors will take a 20 per cent cut in base salary and fees in the second quarter. It has also paused all acquisition activity.
Van Zanten said: “We are taking appropriate actions on cost and cashflow and Bunzl remains a financially strong business with both a robust liquidity position.”
He added he was “proud that large parts of Bunzl are playing an important part in responding to the Covid-19 crisis and continuing to serve critical industries”.