DFS cancels dividend, execs to take pay cut amid shutdown

Sofa and furniture retailer DFS has temporarily closed all of its showrooms, manufacturing and distribution operations in the UK, Ireland and Spain, it said on Wednesday, as it announced the suspension of its interim dividend and said senior leaders will take a pay cut amid the shutdown.

To protect its financial position, it has introduced a number of measures and will be taking advantage of government support, it said.

"During this period, with support from the UK government's coronavirus job retention scheme, we intend to maintain employment for our colleagues for as long as possible."

DFS will cut back on marketing expenditure, pause all discretionary capital and operating expenditure, reduce the usage of consultants and contractors and implement a recruitment and training freeze.

In addition, it said it had agreed with senior leaders of the business to reduce their pay during the shutdown and defer all annual salary reviews.

"We will also be working with our landlords to secure improvements to payment schedules on leased properties. Our mitigated operating cash outflow, during the period of operational suspension, is expected to be c £15m per month from April until we re-open," it said.

The company has also decided to cancel payment of the interim dividend of 3.7p per share, which was due to be paid out in June.

"Until there is greater clarity about the full impact of the pandemic, we are unable to provide further guidance on our revenues and profits, particularly on the financial reporting period to June. The board's priority is to protect our people and our customers, to conserve cash and to manage the group through the Coronavirus pandemic, until further certainty is gained."