IT contracting services firm FDM (FDM) has joined the lengthening list of companies to pull its dividend as it tries to conserve cash during the coronavirus challenge.

The FTSE 250 company was due to pay an 18.5p per share final dividend, worth £20.2m, but this will now not be paid.

FDM has also delayed kits AGM as the UK continues with its lockdown policy. The been scheduled for 29 April and the board now hopes to hold the shareholder event not later than 30 June, although that will obviously depend on how things develop.

‘It is not possible at this stage to predict the scale of the eventual impact of COVID-19 on businesses and economies around the world… in this context, the board considers it appropriate to maintain maximum resilience through a strong balance sheet,’ the company said.

FDM currently has £37m in its coffers and no debt.

MOST MOUNTIES STILL AT WORK

On trading, the company said that a ‘small number of our Mounties have returned from client deployment the vast majority of them continue to work on their client engagements, typically remotely.’

The company may decide to pay more than one interim dividend should the picture become clearer.

Consensus for calendar 2020 was for EBITDA of £61.8m on revenues of £279.6m, both up 3% to 4%, but the company's broker has this morning suspended its forecasts.

‘This isn’t the first crisis FDM has weathered in its almost 30-year history and, as such, management has naturally developed a keen eye towards cash management, hence the robust balance sheet (better than most of its peers) and lack of debt,’ said Megabuyte analyst Indraneel Amrapatta.

FDM shares rallied 3% to 715p.

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Issue Date: 27 Mar 2020