For more information on some of the dividends which were scrapped by FTSE companies this week, please see this post. Clearly, coronavirus is having an impact on dividend investors, with many companies scrapping their dividends. These include William Hill, Crest Nicholson, McCarthy & Stone and many more. It’s a trend that can only be expected to continue in the coming weeks, quite possibly even months.
However, for all investors, there are other stories this week related to COVID-19. From profit warnings to the suspension of share buybacks. It’s clear that this is a week, and indeed a month, which investors won’t forget.
Indeed, by Thursday afternoon, EY had calculated 54 companies had issued profit warnings citing a potential hit to their results from coronavirus pandemic. It’s likely in the end companies across all sectors will be hit by this virus, but amongst the hardest fallers so far are leisure, property and retail.
4 coronavirus related profit warnings
- Frasers Group – said it would not hit its forecast core earnings growth range of 5% – 15%, including House of Fraser but pre-IFRS 16 adjustments, and “given the ongoing uncertainty, the company is no longer giving formal guidance in relation to the financial year 2020”.
- Marks & Spencer – said in a statement that clothing and home sales have seen “substantial decline” since the crisis began, and that profits for the current quarter were likely to be either at the bottom end of the forecast of £440m-£460m, or potentially lower if trading in clothing and home continued to be hit.
- Compass Group – said operating profits in the six months to March 31 will be £125 million to £225 million lower than expected. Analysts had £1.95 billion pencilled in for the full year.
- Flutter Entertainment – said their earnings this year could be reduced by £90-110 million due to the impact of the global pandemic.
We’ll see what next week brings, but it would seem the markets may have further to fall, even after the radical measures announced by the Chancellor.
If you are nervous in these markets, please do check out my plan for investing in a bear market – I hope it helps.