Metair cancels the dividend it had declared for the 2019 year-end, Newsline

CAPE TOWN – Metair Investments yesterday held back on paying the 120cents per share dividend it declared for the year ended in December saying this could imperil the solvency of the company in the uncertain market.

The group said the decision came after the international motor component manufacturing and energy storage company indicated last month that the dividend payout was being deferred due to the uncertainty about the duration and impact of Covid-19.

The group also slammed brakes on the interim dividend was declared for the six months to end June last month following a headline loss equivalent to 56c per share for the six months, versus 160c headline earnings per share the previous year.

Attributable mainly due to Covid-19 lockdown related operational wind downs, Metair said the decision to not pay the year-end dividend was taken despite the company’s financial position remaining relatively strong throughout the Covid-19 pandemic.

The uncertain economic outlook in South Africa and globally was cited as the reason for the non-payment, “especially in light of the likelihood of a potential second wave in Covid-19 infection in South Africa as has been experienced in most European countries.”

The board said it would consider a new dividend at a later stage once it was satisfied liquidity and solvency commitments could be met after distributing a dividend.

Separately, the company also announced that Michael Flemming, currently independent non-executive director, and member and chairperson of the audit and risk committees, would be appointed as chairperson, following Sybrand Pretorius’ plans to resign as chairperson at the annual general meeting in May next year.

Metair’s share price closed 1.96percent higher at R18.25 on the JSE yesterday, maintaining a relatively steady trend since it sunk to R13.04 during the global stock market slump towards the end of March 2020. An analyst who preferred anonymity said their investment firm regard Metair as a high growth company.

Chief executive Theo Loock said last month that the company’s Covid-19 response strategy had served them well and had mapped a plan for recovery in all their businesses, while trading levels had increased as lockdown conditions had eased.

At the interim stage, the company’s solvency and liquidity position remained strong with sufficient cash and available facilities to meet obligations and support growth projects.