Shoe Zone has cancelled its final dividend for the year to 5 October as turnover for the six months to 31 March took a 3.4% hit as a result of the coronavirus pandemic.
The retailer’s turnover dropped 3.4% to £69.9m for the half year, compared with the same period in the previous year.
It said it will suspend dividend payments until it has rebuilt cash balances to a higher level than previously carried, repaid debt and fulfilled other statutory obligations.
It also reissued its previous statement, which said: “The Covid-19 pandemic will have a material impact on the company’s performance for the current financial year”.
At the close of business on 28 April, the business had a net cash balance of approximately £5.4m, having utilised its existing £3m banking facility.
Shoe Zone has also secured a £15m loan from the government’s coronavirus Large Business Interruption Loan Scheme. It is provided by its primary lender Natwest.
The retailer said: ”The timing of the reopening of the company’s stores remains uncertain; moreover the process of reopening, once it begins, is likely to be complex.”
It said it is in ongoing negotiations with its suppliers and landlords, adding: “With the co-operation and understanding of these stakeholders, the board consider the company’s current level of funding will be sufficient to secure the future of the business, assuming that stores are allowed to open gradually during the summer months and return to a high proportion of previous sales over the next year.”