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Woolworths scraps dividend, reviews Australasian real estate assets

As Covid-19 pandemic impact weighs.
A shopper walks to a Woolworths store in Sandton, South Africa. Image: Reuters

Woolworths on Wednesday scrapped its 2020 dividend and said it was reviewing its Australasian property assets as the retailer battles tough conditions created by the Covid-19 pandemic.

Non-food retailers globally have been heavily impacted by lockdowns and face a grim future in the near term as consumers cut discretionary spending to cope with the economic fallout of the pandemic.

Woolworths said the pandemic’s toll on its business had deepened, with turnover and concession sales dropping 18.5% in the nine weeks to April 26, sending its shares down 4.6%.

It said the health crisis had affected performance in all its markets – South Africa, Australia and New Zealand.

Woolworths has hired UBS Australia to review its Australasian real estate portfolio.

It said talks were underway with Australasian landlords on “accelerated restructure” and reduction in floor space for its struggling fashion brand David Jones.

The retailer, which warned in April that full-year profits would fall by more than 20%, said the tough conditions were likely to continue for the “foreseeable future”.

“The board will … not declare a final FY20 dividend and will consider dividends thereafter in the context of the conditions prevailing at the time,” the company said.

It reiterated that it was working to protect the group’s financial position, improve its liquidity and capital structure and re-position the business towards long-term shareholder value.

The firm was also talking with its lenders about the potential impact of the coronavirus-related slowdown on its debt covenants, and had secured or was seeking the suspension of covenant testing from lenders to the Australasian businesses.

The group could extend up to 100 million Australian dollars ($66.4 million) in funding support, in the form of a loan, to those units if successful, it said.

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Another good story to tell hey ANC? How many businesses will fail with lockdown

Wow, novel, you guys can find anything to make it about your precious ANC. Australian National Congress right?

It is pretty clear why nobody can take your lot’s perpetual moaning seriously anymore.

It amazed me how that became about the ANC

The ANC forced Woolworths to buy an Australian company and then introduced 5G and they just won’t take responsibility.

Who exactly do you think you are convincing with your endless whining about the ANC here? The thousands of ANC supporters here? Who exactly are you convincing? You probably see yourself as some kind of resistance fighter. The laziest kind of arm chair activism is yelling into an echo chamber.

End of comments.

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