JD Sports Fashion Plc provided an update on some of the measures it is taking to actively preserve capital across all aspects of its business and thereby limit the level of cash burn amid the coronavirus pandemic.

The Group announced three specific measures that it is taking to help preserve capital in this period:

  • Dividends: Given the current highly unusual circumstances, the Board believes that it is in the best interest of shareholders if the Group maintains its cash reserves and, accordingly, it does not believe that it will be appropriate to pay a final dividend this year. It is the Board’s current intention that the Group would look to resume dividend payments when conditions allow, although it is important that it maintains flexibility around the timing and quantum of the commitment to maximize the available funding for future development opportunities.
  • Temporary Salary Adjustments: The Board and Senior Management team in the Group have agreed to voluntary salary reductions of at least 25 percent for the current period with Peter Cowgill, executive chairman, personally volunteering a salary reduction of 75 percent.
  • Deferment of Incentive Payments: The payment of bonuses and other contractual incentive payments, due or arising in respect of individual and Group performance in the year ended February 1, 2020, have also been deferred. It is the intention of the Board and Remuneration Committee that these will be paid at some point after its stores have re-opened, with the timing of the payments reflecting the evidence of its actual post-re-opening performance and the projected cash flow of the Group.

The company also confirmed the revised date for the publication of its preliminary results for the 12 months to February 1, 2020.

JD Sports said that on March 26, 2020, the Financial Conduct Authority (‘FCA’) announced a temporary relief for listed companies that are due to report financial results during the current coronavirus crisis. This temporary relief extends the period in which listed businesses are required to publish their audited financial statements from four months to six months.

JD Sports said its Board believes that it is in the best interest of investors, and other stakeholders, for the Group to announce its results at a later date so as to provide the greatest amount of clarity on the impact of COVID-19 on the Group’s performance for the current financial year to January 30, 2021. Accordingly, the Group will announce its results on July 7, 2020. The company’s Annual General Meeting will now be held on July 31, 2020.

Photo courtesy JD Sports