Listed firm Gateley has cancelled an interim payment to shareholders as it seeks to bolster the company’s short-term liquidity.
In a statement this week to the London Stock Exchange, the group said the proposed dividend of 2.9p per share, due for payment at the end of this month, would be scrapped.
Gateley said it remains ‘highly resilient’ with a strong client base, low levels of debt and a wide range of services.
But with the coronavirus pandemic causing the economy to slow, the Gateley board decided it would be ’prudent and in the best interest of all stakeholders' to hold off payments. It will also suspend financial guidance being published until the impact and duration of the virus becomes clearer.
Michael Ward, Gateley chief executive, said: ‘We consider these measures to be in the best interests of all our stakeholders. Gateley is a resilient and well-balanced business and our economic and geographically diversified business model is well-placed to withstand difficult economic conditions.
‘On behalf of the board, I thank all of our people for their continued dedication and hard work under these extremely challenging circumstances and for ensuring that our clients continue to receive the outstanding level of service which they have come to expect from Gateley.’
The firm said it has completed a ‘solid’ performance in the first half of the financial year, enhanced by four acquisitions and complemented by economic improvement post-election. Trading until the end of February was ‘in line’ with expectations but has reduced since then as a result of the disruption caused by COVID-19.
Gateley said it has successfully mobilised staff to work from home in line with all government guidelines, and many parts of the business are currently busy assisting clients with COVID-19-related issues.
In line with most other public companies, the Gateley share price has tumbled in recent weeks since the outbreak, from an all-time high of 218p in mid-February to 124p today.
Meanwhile, listed entity Redde Northgate, whose businesses include New Law Legal and Principia Law, has also announced it will suspend all forward guidance until circumstances around the virus become clearer. The group said it is focusing on the health, safety and wellbeing of staff, but is also taking steps to conserve cash to withstand a ‘prolonged downturn’ should global issues persist.
Martin Ward, chief executive, said: ‘The matters that we can control on cost and cash are being managed carefully. The headroom the group has is significant and we will continue to manage our resources carefully through the coronavirus crisis.’
The company’s share price increased 11% today to reach 146.2p.
National Accident Helpline, also listed on the AIM market of the stock exchange, has delayed publication of its final results for 2019, which had been due out yesterday.
*The Law Society is keeping the coronavirus situation under review and monitoring the advice it receives from the Foreign & Commonwealth Office and Public Health England.