Walmart received £1.1bn Asda dividend weeks before the first lockdown

Walmart received £1.1bn Asda dividend weeks before the first lockdown
Walmart agreed to sell the supermarket chain to the billionaire Issa brothers and private equity firm TDR Capital for £6.8 billion in October following a lengthy auction process.
// Walmart paid itself a £1.15bn dividend from Asda back in early March
// The pay-out was confirmed in the Big 4 grocer’s filed accounts for the 2019 financial year
// Pay-out also came just a week after Walmart confirmed that it was in talks to sell a majority stake in Asda

Asda has said that former owner Walmart paid itself a £1.15 billion dividend from the supermarket chain, just weeks before the Covid-19 pandemic forced the UK into the first lockdown over the spring.

The pay-out was confirmed in the Big 4 grocer’s filed accounts for its 2019 financial year.

Walmart agreed to sell the supermarket chain to the billionaire Issa brothers and private equity firm TDR Capital for £6.8 billion in October following a lengthy auction process.


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Asda said it paid out the dividend of “surplus cash” to Walmart on March 5.

The pay-out came just a week after Walmart confirmed at the end of February that it was in talks to sell a majority stake in Asda, following the collapse of plans to merge with rival Sainsbury’s after it was blocked by CMA.

The pay-out also came weeks before grocery demand soared due to customer stockpiling as coronavirus cases started to sharply rise across the UK.

Rivals Sainsbury’s and Tesco faced criticism after making multi-million pound pay-outs to shareholders despite taking financial support from the state to deal with the initial impact of the virus.

However, the two supermarkets, alongside Asda and a host of others, have agreed to refund furlough support and the business rates tax break.

Last week, Asda agreed to hand back its £340 million worth of business rates relief.

On Friday, Asda said it was able to make the £1.15 billion dividend pay-out – its first major dividend payment since 2017 – after a pension deal with Rothesay Life meant it had cash on its balance sheet.

This resulted in a one-off payment by Asda of £1.17 billion, which it said would secure the benefits of its 12,300 members on the pension scheme.

The dividend payment was also despite Asda posting a 27 per cent decline in operating profits to £584 million, as sales fell by 0.8 per cent to £22.9 billion for 2019.

In its most recent trading update, Asda said like-for-like sales increased by 2.7 per cent in the quarter to the end of September.

Asda chief financial officer Rob McWilliam said: “This annual report is a record of the progress we made in investing for customers and advancing delivery of our strategy in 2019.

“During the year, we invested incrementally in our customer offer, delivering lower prices to millions of customers and improving the quality of thousands of own-brand products through use of healthier ingredients and more sustainable packaging.

“Another key milestone was the agreement with Rothesay Life for a buy-in of the Asda Group Pension Scheme.”

with PA Wires

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