The Harvey Norman Holdings Limited (ASX: HVN) share price will be on watch today after the retail giant became the latest company to cancel its dividend.
This follows moves by Adairs Ltd (ASX: ADH) and Flight Centre Travel Group Ltd (ASX: FLT) last month and countless dividend payment deferrals by others.
What did Harvey Norman announce?
The company notes that the Australian Government has announced various measures in response to the COVID-19 pandemic.
Given the uncertainty regarding the duration of the COVID-19 pandemic and its potential impact on Harvey Norman's trading, the company's board has decided to revoke the decision to pay its FY 2020 interim dividend of 12 cents per share.
This dividend, which was scheduled to be paid to shareholders on May 4, will now be cancelled.
This action will result in $149.5 million of cash being retained in the business. Which the board believes is the most prudent course of action to protect shareholder value in the present environment.
Executive pay cuts.
In addition to the dividend cancellation, the company announced other initiatives to conserve cash.
This includes its chairman, chief executive, and other executives forgoing 20% of their salaries for the next three months.
The company's non-executive directors have also voluntarily elected to reduce their directors' fees by 20% for the same period.
Dividend deferral.
Harvey Norman wasn't the only company releasing a dividend update after the market close on Thursday.
Crown Resorts Ltd (ASX: CWN) also provided an update and revealed that it will be deferring the payment of its dividend from today to April 17.
Crown explained that it made the move as it is in the process of finalising a number of new financing arrangements.
It is worth noting that the casino and resorts operator warned that this dividend is subject to further deferral if necessary while these financing arrangements are finalised.
