British housebuilder, Crest Nicholson, has announced that it has cancelled its planned dividend as a result of the coronavirus outbreak as it issued an update on the impact of the virus on its business.
Crest said it had “taken the difficult decision” to scrap its final dividend of 21.8 pence per share, otherwise payable on April 9 2020, adding that it would also suspend all existing financial guidance “until both the severity and duration of the COVID-19 impact becomes clearer”.
In a move to increase cash generation, Crest said it had “made arrangements” to fully draw its £250 million revolving credit facility, yielding available cash of £185 million.
The housebuilder stated: “In the ordinary course of business, the company has a strong balance sheet and has made good progress in reducing levels of capital employed in the current financial year. The board has only considered it necessary to take such decisive action because of the anticipated impact from COVID-19.”
Since the start of the year up to and including March 16, Crest said it had traded in line with expectations, seeing continued increases in website traffic, footfall and reservations and had made “strong progress” with its new business strategy.
The firm added: “However, the board has carefully considered this week's rapidly evolving government guidance in respect of COVID-19 and expects this to have a significant impact on visitor levels, production capability and trading performance over an unclear timeline.
"The changes made in response to the health crisis were “in the best interests of all our stakeholders and will best ensure the long term viability of the business at this time”.