(Alliance News) - Financial administration outsourcer Equiniti Group PLC on Wednesday said it has withdrawn its full-year guidance and will no longer pay a final dividend due to the Covid-19 outbreak.
Equiniti has "proactively" cut costs, reducing capital expenditure, implementing a hiring freeze and deferring salary reviews for senior staff.
"The overarching importance of the retention of jobs and skills is recognised, and government support packages are being utilised where appropriate. Whilst implementing these measures to contain our costs, the flexibility and performance of our operations has been sustained without interruption," Equiniti said.
"Whilst the group's resilient business model is underpinned by a high degree of recurring revenue and enduring relationships with large listed corporates and government, the unprecedented nature of the crisis has forced some clients to defer, or in some cases suspend, projects."
In the UK, its revenue has been held back by "lower corporate activity, fewer share-dealing programmes, and reduced dividend commissions, partially offset by increased share dealing and virtual annual meetings".
Uncertainty in equity markets has hit Equiniti's US division.
"Given the unprecedented uncertainty around the impact of Covid-19, it is not possible to assess with certainty the impact this will have on the group's financial performance for the year. As such, the group is withdrawing its previous guidance for the year ending December 2020," Equiniti said.
"Notwithstanding the relatively resilient trading position and the group's strong liquidity, the macro economic environment is one of heightened uncertainty. After due consideration the board has decided it will no longer propose a final dividend for the year ended December 31."
Shares in the company were 8.7% lower at 148.20 pence each in London on Wednesday morning.
By Eric Cunha; ericcunha@alliancenews.com
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