Debt purchaser Arrow Global has withdrawn its previously announced dividend for 2019, as the pan-European group moves to prudent cash conservation.
In an RNS announcement, the board said it would no longer recommend the final dividend of 8.7p per share for the full year 2019, a change that will save the business around £15m in cash.
The company also stated on April 6 that nearly 100 percent of its employees across the five countries it operates in, are working from home with full operational capability. However, due to economic uncertainty, it could not give financial guidance for the 2020 financial year.
The announcement added: “As noted within the group’s preliminary results on 12 March 2020, the company’s foremost concern regarding the rapid spread of the COVID-19 virus has been to safeguard the health and wellbeing of our colleagues and ensure continuity of service for our customers and clients.”
Arrow said it is yet to see a meaningful operational and financial impact on the group so far, but the current uncertainty caused by COVID-19 and its impact on economic activity has precipitated a move to hold onto cash.
The statement added: “The board believes that conserving capital and maximising financial flexibility is in the long-term best interests of the business and all stakeholders.
“Accordingly, the board is no longer recommending the final dividend of 8.7p per ordinary share for the year ended 31 December 2019, that wasv announced with the full-year 2019 results on 12 March."
A resolution to approve the 2019 final dividend payment of 8.7p/share will no longer be proposed at the debt purchaser’s Annual General Meeting (AGM).
The group’s statement added: “Whilst we believe that the group’s strong financial position and resilient business model leaves us well placed to navigate this period of uncertainty, the board views the cash saving of approximately £15m from withdrawing the dividend to be prudent and in line with the group’s approach to minimising financial risk.”
Arrow explained that it will assess appropriate methods of capital allocation as the year progresses, including the level of investment business portfolio purchases. Arrow added that the business has a strong liquidity position, with “£153m of headroom as of 31 March 2020, and no debt facilities maturing until 2024.”
In its full-year results for 2019 published last month, Arrow announced a 28 percent rise in pre-tax profit, and a record £307.7m of additional investment.
The group will announce Q1 results for 2020 on May 14.