// Shoe Zone cancels final dividend due to Covid-19 impact
// Turnover dropped by 3.4% to £69.9m for the half year
Shoe Zone has scrapped its final dividend for the year to October 5 as turnover for the six months to March 31 took a hit due to the coronavirus lockdown.
Turnover dropped by 3.4 per cent to £69.9 million for the half year, compared with the same period in the previous year.
Shoe Zone said it would suspend dividend payments until it has rebuilt cash balances to a higher level than previously carried, repaid debt and fulfilled other statutory obligations.
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“The Covid-19 pandemic will have a material impact on the company’s performance for the current financial year,” Shoe Zone said.
At the close of business on April 28, the business had a net cash balance of approximately £5.4 million, having utilised its existing £3 million banking facility.
Shoe Zone also secured a £15 million loan from the government’s coronavirus Large Business Interruption Loan Scheme.
”The timing of the reopening of the company’s stores remains uncertain; moreover the process of reopening, once it begins, is likely to be complex,” it said.
“With the co-operation and understanding of these stakeholders, the board consider the company’s current level of funding will be sufficient to secure the future of the business, assuming that stores are allowed to open gradually during the summer months and return to a high proportion of previous sales over the next year.”
Earlier this month, Shoe Zone confirmed it had furloughed the majority of its 3500-strong workforce due to the ongoing coronavirus crisis.