WPP AUNZ cancels dividend payment as ‘prudent and cautious’ response to COVID-19 uncertainty
WPP AUNZ has cancelled payment of the dividend it announced in its financial results last month, citing the “unprecedented uncertainty as to the impact and duration of the COVID-19 pandemic”.
The decision means the ordinary dividend payment of 2.9c per share will not be paid, in addition to the special dividend payment of 1.5c per share with a record date of 31 March.
WPP is not immune from the effects of the virus
However, despite posting a statutory net loss of $227.57m, the business said in the dividend announcement posted to the ASX this morning that it is in a “sound financial position”.
“Whilst WPP AUNZ is in a sound financial position, with net debt of $121.4 million and a leverage ratio of 1.1x net debt/ EBITDA [earnings before interest, tax, depreciation and amortisation] as at 31 December 2019, the Board has decided to take this action now as a very prudent and cautious approach to capital management to ensure cash is preserved until there is greater clarity as to the full impact of the rapidly unfolding COVID-19 crisis,” the statement read.
“The Board will update the market as to our future intentions in relation to the payment of the ordinary and special dividends as the economic and industry outlook becomes clearer.”
Brittney Rigby was Mumbrella's deputy managing editor - news and analysis. She left Mumbrella in April 2021.
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No surprise really, it is now worth .23 cents a share down from $1.30 a share about 2 years ago.
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