Shoe Zone scraps dividend as Covid-19 hits turnover

British footwear retailer Shoe Zone has scrapped its dividend for the financial period ended 5 October after the company’s turnover took a hit from Covid-19.

For the six months to 31 March, turnover fell 3.4 percent year-on-year to 69.9 million pounds.

As of 28 April, the company had a net cash balance of approximately 5.4 million pounds, having utilised its existing 3 million pound bank facility.

It also said it has secured a 15 million pound loan through the Coronavirus Large Business Interruption Loan Scheme.

The company said that the timing of reopening its stores remains uncertain and the process will be “complex”.

“The board considers the company's current level of funding will be sufficient to secure the future of the business, assuming that stores are allowed to open gradually during the summer months and return to a high proportion of previous sales over the next year,” the retailer said.

“Over the forthcoming financial periods, Shoe Zone will focus on rebuilding cash balances to a higher level than previously carried, repaying debt, and fulfilling other statutory obligations. The board believes that this focus is necessary to ensure the long term viability of the business, and the company will therefore only recommence the payment of dividends to shareholders once these objectives have been met.”

Photo credit: Shoe Zone, Facebook