The Irn-Bru maker, AG Barr, is to delay the publication of its full-year results, scheduled for Tuesday, on the back of the FCA request. Photograph: Russell Cheyne/Reuters
The deepening coronavirus crisis has forced UK companies to scrap dividend payments to shareholders worth £500m in one day, as heavy selling on global stock markets continued for a fifth week.
The total amount of dividends cancelled this year so far has reached £1.5bn, as every sector of the economy feels the impact of the pandemic. On Monday the companies scrapping payouts to save cash included the B&Q and Screwfix owner Kingfisher, the broadcaster ITV, the bus operators Stagecoach and Go-Ahead and the clothing retailer N Brown, whose brands include Simply Be and Jacamo.
Russ Mould, investment director at stockbroker AJ Bell, said: “It is another brutal day for income seekers as 10 more UK firms announce dividend cuts and an 11th – Britvic – joins Next and National Express in reviewing its payout as part of its contingency planning.”
Mould described the cutbacks as “a big blow for portfolio builders and savers who are looking for income at a time when interest rates on cash are reaching new historic lows”.
The FTSE-100 dropped almost another 4%, closing down 197 points at 4994.
As the corporate toll of the virus outbreak mounted, Britain’s financial watchdog wrote to companies over the weekend, advising them to delay their financial results for at least two weeks.
Kathleen Brooks, founder of the consultancy Minerva Analysis, said on BBC Radio 4: “This is a very big shift from the Financial Conduct Authority, this is a big statement, and there have been some people speculating that maybe this is a sign that stock markets will close down.
“One assumes that they don’t want to see continued falls of 15%-plus per week, but this is very unprecedented. Nothing like this happened during the financial crisis.”
The FCA later said it had no plans to close markets or ban short-selling, saying: “There is no evidence that short selling has been the driver of recent market falls.” It added that while there had been “significant volatility in market prices over the past weeks” and that this might continue for a period, markets had “continued to operate in an orderly fashion in the UK”.
The FCA said it strongly requested that all listed companies observe a moratorium on the publication of preliminary financial statements, noting that financial investors rely on trustworthy information on companies.
“The unprecedented events of the last couple of weeks mean that the basis on which companies are reporting and planning is changing rapidly,” the watchdog said. “It is important that due consideration is given by companies to these events in preparing their disclosures.”
Top 10 dividend cuts/deferrals announced since January
23 March ITV: £216.2m
18 March Micro Focus: £165.1m
23 March Kingfisher: £158mAdvertisement
20 March Marks & Spencer: £132.6m
20 March InterContinental Hotels: £120.4m
25 February Hammerson: £91.2m
20 March Travis Perkins: £83.2m
12 February Intu: £62.3m
19 March Crest Nicholson: £56m
16 March William Hill: £46.7m