North East estate agency LSL wants to scrap its dividend to shareholders to save £7.4m as part of moves to protect the business during the Covid-19 crisis.
Earlier this month the Newcastle firm - owner of Reed Rains and Your Move amongst others - said it had made a positive start to 2020, with profits coming in £2.2m ahead of last year.
Since then, however, and following the Prime Minister's announcements, directors said activity levels have dropped very sharply, triggering a series of measures; to bring down operational costs, optimise the balance sheet and protect employees, customers and business partners.
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Those measures include closing all estate agency branches, with branch staff working from home, and scrapping the planned dividend.
The firm said that, prior to the Covid-19 outbreak, the LSL Board had planned to recommend a final dividend at the upper end of the range of LSL's stated dividend policy.
However, the statement said: “Given the uncertainty of how deep and how long the impact of Covid-19 will be, alongside the other measures we are taking to preserve the group's cash position, the LSL Board has decided not to recommend a final dividend for the year ended December 31 2019 to shareholders for approval at the 2020 AGM.
“This represents a cash saving of £7.4m in H1 2020.
“The LSL Board believes that this is an appropriate measure to take at this point as the group seeks to preserve its liquidity, cash flow and financial position during this period of uncertainty.”
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It has also put in place a recruitment freeze as well as suspension of the annual pay review, for all the staff and board.
It also said it would be “rightsizing team activity levels” to reflect the drop in transaction volumes, and all non-critical capital expenditure has been deferred.
Last month the firm was in discussions with Countrywide over a proposed merger, which would have created the biggest firm of its kind in the 海角视频.
Those talks were scrapped, however, and the firm said that all group wide acquisition activity has now been halted for the foreseeable future.
Simon Embley, chairman, said: "We are facing unprecedented market conditions caused by COVID-19. We are taking prompt decisive self-help actions across the Group to preserve liquidity, reduce costs and optimise the business for the short and medium term. We are well positioned to deal with the disruption caused by COVID-19, with a strong balance sheet and a capable and experienced management team across the Group.
“The welfare of our colleagues is an ongoing priority for us and the LSL Board would like to take this opportunity to thank all of our colleagues for their ongoing professionalism during this challenging time.
“The LSL Board believes that in taking prompt, decisive and appropriate action to respond to market conditions in combination with its strong balance sheet, the business is well positioned to emerge strongly when market conditions improve.”
In a later update, the company said that it had decided to delay the announcement of the date and arrangements for its 2020 Annual General Meeting