23 March 2020 | Herpreet Kaur Grewal
Facilities services company ISS reports that its operations are being affected by the spread of coronavirus.
As a result, it says, "the board of directors has, as a precautionary measure, decided to withdraw the proposal for paying an ordinary dividend of DKK 7.70 [£0.952] per share in connection with the annual general meeting on 2 April 2020".
It added: "In these extraordinary circumstances it is the prudent thing to do as we balance the needs of our employees, customers, suppliers, investors and other stakeholders. Once we gain more clarity around the situation created by Covid-19, we will assess the appropriate amount to be returned to shareholders in 2020, either as an extraordinary dividend or a share buy-back."
It also said that its operating margins are supported by contract clauses and a flexible cost structure, but they are currently facing a reduced level of activity across many customer sites, currently most notably within food services (15 per cent of group revenue in 2019), as well as a fall in the demand for projects and above base work.
The situation varies greatly by geography, by customer segment and by service. ISS reports that they are in close dialogue with "customers and adapting accordingly within the framework of our contracts. Where demand for our services is impacted, we are adjusting our costs base while utilising any government support available".
The company said its organic growth for January 2020 was "strong and above our expectations at 7 per cent".