Car dealership business Inchcape has scrapped its dividend as part of measures to preserve cash after being hurt by the coronavirus outbreak.
The motor retailer said trading in a “large number” of its markets has been impacted by closures or “significantly lower business activity” as a result of the virus.
The UK-based firm said its global expansion is supporting its performance, with 14 markets still operating, including in Australia, Hong Kong and Ethiopia.
Inchcape said it has taken “swift action” to reduce its cost base and capital expenditure to mitigate the impact of the virus.
It said its board and senior management have opted to take a 20% cut in salary and fees during the second quarter in order to support the business.
The company has also scrapped its plan to payout a 17.9p final dividend as it looks to preserve more cash.
Inchcape said it is “comfortable” that it has sufficient financial resources to get through the crisis, following stress testing.
However, it said it is exploring other debt options to increase its liquidity and flexibility.
Inchcape stressed to investors that it has a “strong balance sheet”, with the group having liquidity of around £600 million.
On Monday, industry figures revealed that the number of new cars sold in the UK in March fell by 44% compared with last year as the pandemic weighed on demand.
In a statement, Inchcape said: “The safety of our colleagues and customers is of paramount importance and we are taking all necessary precautions to safeguard them.
“Looking beyond the current environment, we believe Inchcape remains well placed given our strong relationships with equipment manufacture partners, focus on distribution, exposure to markets with a structural growth opportunity and supported by a strong balance sheet.”
Shares in the company were up 6.7% at 465.4p in early trading.