JD Sports tightens belt to preserve capital through crisis
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JD Sports Fashion, the owner of one of the UK’s top tackle suppliers, has announced a number of financial measures designed to preserve capital in light of the COVID-19 pandemic.
The owner of retail chains that include GO Outdoors has also postponed publishing its audited results from four to six months to allow it to ‘provide the greatest amount of clarity’on the impact of the virus on the group’s performance for the current financial year.
The three measures include the withdrawal of a final dividend payment to investors, temporary salary cuts for Board members and senior management and a deferment of incentive and bonus payments to staff.
In a statement to the London Stock Exchange, it said: “Given the current highly unusual circumstances, the Board feels it is in the best interests of shareholders if the group maintains its cash reserve and so, accordingly, it does not believe that it will be appropriate to pay a full final dividend this year.
“It is the Board’s current intention that the group would look to resume dividend payments when conditions allow, although it is important that we maintain flexibility around the timing and quantum of this commitment so as to maximise the available funding for future development opportunities.”
It added that Peter Cowgill, Executive Chairman, has personally volunteered to take a 75% pay cut, while other Board members and senior staff are taking reductions of at least 25%.
JD Sports has also deferred the payment of performance-related bonuses and incentives for the year ended February 1st, 2020. It said: “It is the intention of the Board and Remuneration Committee that these will be paid at some point after our stores have reopened, with the timing of these reflecting the evidence of our actual post-reopening performance and the projected cash flows of the group.”