International Personal Finance PLC (LON:IPF) has cancelled its final dividend payment as governments in its home lending markets have introduced caps and moratoria on debt repayments because of the coronavirus crisis.
Collections from its home credit businesses are now being “significantly adversely affected” by lockdowns in Poland, Hungary and Romania, while in Mexico it is taking pre-emptive action in anticipation of government moves.
In response to reduced collections and some tighter price caps, IPF has “significantly restricted” lending across all its businesses.
Spending and salary increases of staff and directors are being deferred, costs are being reduced and discretionary expenditure curtailed, the company said.
The cancelling of the proposed 7.8p per share final dividend will result in a cash saving of £17.3mln.
The lender said it had headroom on undrawn debt facilities of £203mln and an equity-to-receivables capital ratio of 45%.
While there is great uncertainty over the impact of the coronavirus pandemic, the group said liquidity stress testing to assess whether the business could cope with a further deterioration in collections performance showed it “can manage cash flows by reducing lending volumes to retain adequate operational headroom against our debt facilities”.