Marks & Spencer scraps 2021 dividend and warns of prolonged coronavirus disruption
Marks & Spencer (M&S) has cancelled next year’s dividend in order to save £210m as the retailer warned of prolonged disruption to trading.
The high street giant said it was preparing a “never the same again” programme to make permanent changes to ways of working, which will be unveiled when the company publishes its full-year results on 20 May.
The retailer had already scrapped this year’s shareholder payout due to the pandemic and last month warned that profit could fall below expectations of £440m to £460m.
M&S’s key clothing & home division, which has been the focus of a turnaround plan over the last year, will suffer from “materially subdued trading” throughout the rest of 2020, the company warned.
“We are planning for the clothing & home business to be severely constrained during lockdown and highly uncertain trading conditions in a prolonged exit period,” M&S said.
The company’s food division has been negatively impacted during lockdown due to the closure of cafes, a slowdown in in travel and some city centre locations. M&S said its partnership with Ocado is on track to proceed in September this year.
M&S has confirmed that it is eligible for a loan under the government’s Covid Corporate Financing Facility. Its lenders have also agreed to relax or remove covenant conditions for tests in September and next year.
“The crisis has created a very different way of working and rapid learning for the business at all levels,” M&S said in a statement this morning.
“At the time of the results presentation we will also outline measures being taken to accelerate the transformation programme and change ways of working permanently under our “never the same again” programme currently being prepared for implementation.”