Pick n Pay holding onto millions cash due to Covid-19 uncertainties
Pick n Pay is holding onto about R850m in cash by not paying a final dividend, warning that the disruptions caused by Covid-19 has disrupted trade in more profitable goods.
I just think it is prudent. We did give it a lot of consideration, I think we had pretty strong result last year in the context of the economy... therefore normally we would not have blinked twice and issued a dividend. I think in these uncertain times anybody who can guess what the liquidity situation is going to be in three to six months is clearly a better man than me. And we concluded that prudence was the better part of valour on this one.Richard Brasher, Chief Executive Officer - Pick n Pay
We deferred it - some people used the word scrapped - we have not scrapped it we are not spending our dividend, it's sitting there. Nobody knows the ebb and flow and twists and turns around Covid-19, sadly.Richard Brasher, Chief Executive Officer - Pick n Pay
We're not afraid of cash flow; we're just very conscious. I've seen quite a few crises in my 35 years career including the downturn in 2007. We've always deferred until clearer. We're a robust business...we pay our bills on time, we pay our suppliers on time and we pay our staff on time. The impact of Covid-19 clearly was not in the results yet because our results are to the end of February. But 27 per cent of our products are not for sale because the rules from government have denoted it to be non-essential. That is 15 to 20 per cent of the turnover in a business and therefore it will have an impact.Richard Brasher, Chief Executive Officer - Pick n Pay
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