Strong balance sheet
Macfarlane board takes salary hit, dividend pulled
Macfarlane: ‘strong balance sheet’
Directors and senior managers at packaging group Macfarlane are taking a cut in salaries and fees for six months in response to the coronavirus outbreak.
The Glasgow-based firm has also withdrawn its final dividend and halted most capital expenditure.
In a trading update the board said the directors will waive 25% of their salaries and fees from April until September and the executive directors have deferred payment of their 2019 bonuses. All non-critical operational and capital spend has stopped.
The board will not pay the proposed final dividend of 1.76 pence per share. This will reduce cash outflows by £2.8 million in the second quarter of 2020.
Once trading has recovered the board’s intention is to augment regular dividends or declare a special dividend.
On current trading, the company said customers in the hygiene, household essentials, medical and food sectors are demonstrating strong ongoing demand as they play a vital role in helping the country meet the challenge of COVID-19.
However, customers in other sectors such as automotive, aerospace and segments within retail have been materially impacted and their business has declined rapidly.
The company said it has a strong balance sheet and liquidity headroom.
The board is advising shareholders not to attend the AGM in person this year and instead to submit proxy votes.
It will explore ways to enable shareholders to participate in the AGM, including streaming the proceedings over the internet and providing the opportunity for shareholders to submit questions for the board to consider at the meeting. Further details to enable shareholder participation will be advised in due course.