Yule Catto latest to scrap its dividend to save cash

Yule Catto, the chemical group, is the latest UK company to scrap its dividend in the face of economic uncertainty and the need to conserve cash.

Although Yule Catto has signed a three-year £30m revolving loan with its principal banks, HSBC and Barclays, to replace the existing facility that is due to mature in November 2009, the group's management remains concerned about its liability levels.

Plans to take debt off the Yule Catto balance sheet have made progress. Some £55m has come in from the sale of three out of the company's five Impact Chemicals businesses, and there is an internal efficiency programme in train. But it is not enough, and net debt remains at £140m-£145m – or around 2.3 times earnings. The board wants to bring it down to below £100m over the next one to two years and, although the expectation is that dividend payments will resume within that period, in the short term they are to be shelved.

Yule Catto told the stock market yesterday: "In light of the current financial environment and economic uncertainty, the board has decided to suspend the payment of dividends until such time as net debt is nearer to its overall target and at which time the business environment and financial market conditions may well have improved."

The company joins a growing list. In December alone, Cattles, the sub-prime and doorstep lender, scrapped payouts for at least a year, blaming continuing delays in gaining a banking licence. And the car dealer Inchcape, warning that profits for 2009 will be hit by a rapid fall in sales, announced 1900 job losses and cancelled its dividend.

Since the summer, such announcements have come thick and fast. In July, Barratt Developments announced the postponement of payments alongside 1200 job cuts and an £85m writedown. In September, the plumbing materials giant Wolsley joined the pack as the problems in the housing market spread into the building sector. Punch Taverns, the pub company, and Mitchells & Butlers, its main rival, have taken a similar route, as have retailers including Topps Tiles and DSG International, the parent company of PC World and Currys.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...