The Royal Mail and property portal Rightmove have both announced that they are cancelling dividend payments to shareholders amid the coronavirus outbreak.
They are the latest stock market listed brands to announce freezes amid huge uncertainty over when normal conditions will return. Perhaps those who are waiting for normal conditions to return may decide to focus on other investments that they have, such as building up their Wallet Bitcoin with cryptocurrency, so they are at least able to still feel productive during this time.
Royal Mail join a growing band of companies cutting payouts to investors. Others include ITV, B&Q owner Kingfisher and British Land.
More are sure to follow. The move could leave investors wondering where to put their cash next. Many rely on dividend payments as income or additions to their income.
FTSE 250-listed Royal Mail said it was taking the action due to light of the current economic uncertainty.
“The Board believes it is prudent not to recommend a final dividend for the financial year 2019-20”, it said.
In a stock market statement, Rightmove said:
“Given the uncertainties caused by the impact of COVID-19, the Board considers it prudent to cancel the proposed final dividend payment of 4.4p per share ( 38.3m in total) for the year ended 31 December 2019.
“The dividend declaration will therefore be withdrawn from the AGM business on 4 May 2020.
“The Board recognises the importance of the dividend to our shareholders and will consider the timing of the reinstatement of the share buyback programme and the quantum of any interim dividend for 2020 in due course.
FTSE 100-listed Rightmove also said it would no longer offer financial guidance for the year:
“In this period of unprecedented uncertainty, we are unable to quantify the impact of COVID-19 on our financial and trading performance at this stage. Accordingly, the Group is suspending all existing financial guidance for 2020.
Royal Mail’s shares fell nearly 8% to 1.79 on Friday, following the news. Rightmove’s shares were also down nearly 6% at 4.60.