Fuller, Smith & Turner PLC (LON:FSTA) has become the latest firm to suspend its dividend as it took steps to preserve cash amid the closure of its entire pub estate due to the coronavirus pandemic.
The pub chain said the cancellation of the payout will save it around £6.8mln, adding that it has also furloughed over 95% of its employees, suspended all non-essential capital spend and is negotiating with its suppliers to reduce costs further.
READ: Fuller, Smith & Turner warns of ‘material reduction’ in trading as coronavirus forces closure of all pubs
Fuller’s chief executive Simon Emeny also said the company was supporting its pub tenants by cancelling all commercial rent payments, while he and his colleagues on the board had all taken a 25% pay cut.
"We have implemented a wide range of measures that will impact all our stakeholders, but will protect the business and ensure that we emerge in a strong position to build for the future”, he said.
In a note on Friday, analysts at Liberum, which rate Fullers at ‘hold’ with a 950p price target, estimated the company’s cash balance gave it “over eight months of survival” and that the stock had held up “relatively well” in the circumstances.
The survival forecast was echoed by analysts at Peel Hunt, who estimated that the company has “[seven to eight] months of liquidity”.
The company’s shares were 1.4% lower at 690p in early trading.