Centrica share price hits new all-time low after cancelling dividend
The UK-based energy company has seen its shares hit a new all-time low on Thursday after cancelling its annual dividend due to fall in business usage amid the Covid-19 pandemic.
Centrica shares hit a new all-time low on Thursday after the energy company cancelled its annual dividend in a bid to cut costs amid customers deferring electricity payments and a fall in business usage due to the lockdown.
The UK-based energy company had planned to deliver a final dividend payment of 3.5p a share to shareholders on June 2020.
Centrica hit an all-time low of 33p a share at lunchtime on Thursday, down 9%.
‘As the scale and length of the crisis unfolds, it is becoming increasingly clear what a vital role so many of the Centrica team perform to keep our communities warm, safe and supplied with energy,’ Centrica Interim Group CEO Chris O’shea said.
‘While there are so many uncertainties surrounding the impacts of this situation, I am confident that we have acted promptly and prudently to underpin the long term strength of Centrica,’ he added.
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Centrica cuts dividend to bolster balance sheet amid Covid-19
Centrica’s decision to cancel its dividend comes as the company looks to maintain a strong balance sheet to mitigate the economic fallout from Covid-19, with confirmed cases of the virus likely to surpass one million in the coming days.
However, the energy company admitted that the financial impact of the coronavirus outbreak is still difficult to quantify.
To offset to economic impact of the virus, Centrica plans to reduce cash expenditure by around £400 million in 2020, though the company has put its divestment process of Spirit Energy on hold until financial and commodity markets have stabilised.
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