Arrow Global shares jump despite scrapping dividend
Debt purchasing group Arrow Global’s shares shot up almost 11 per cent today as it said it is well placed to survive the tumult of the coronavirus outbreak, despite cancelling its dividend.
Arrow Global said it will not pay a final dividend of 8.7p for its 2019 financial year in order to shore up cash against the coronavirus fallout.
But the FTSE All Share firm said it is “yet to see a meaningful operational and financial impact” from Covid-19.
And it moved to reassure investors that its finances are robust, saying it has liquidity of £153m and no debt repayments scheduled until 2024. Cancelling the dividend will further protect Arrow against any potential coronavirus hit, it told shareholders.
“We believe that the group’s strong financial position and resilient business model leaves us well placed to navigate this period of uncertainty,” Arrow said.
“The board views the cash saving of approximately £15m from the decision to withdraw the dividend to be prudent and in line with the group’s approach to minimising financial risk.”
Arrow Global’s share price jumped 10.7 per cent to 99p. Its share price has plunged from almost 300p in late February, when the FTSE began to slump over the coronavirus outbreak.
“This decision in no way diminishes the board’s confidence in the long-term outlook for the group and the strength of the through-the-cycle model,” Arrow added. But along with a multitude of UK-listed companies, Arrow opted against issuing 2020 financial guidance due to the coronavirus crisis.
The firm missed its annual profit target last month amid its transition from a debt investment firm to a third party fund manager.
The division has an initial €838m (£738m) funds under management, and is targeting a total of €2bn under management by the end of 2020.