Plastics, paper and packaging manufacturer Mpact is postponing its payment of its cash dividends for the 2019 financial year by five months, in light of uncertainties brought about by the national 21-day lockdown.
This is expected to help preserve the company’s financial liquidity.
The postponement of the dividend payment will shift from April 6 to September 7.
The company, on March 4 declared a final gross cash dividend of 42c a share for the year ended December 31.
However, the duration and impact of the lockdown on the operational activities of Mpact’s businesses has resulted in the company’s board of directors considering it more prudent and in the best interests of the company, and all its stakeholders, to delay to payment.
Mpact’s board believes the postponement of the dividend payment, amounting to R72.79-million, together with the company’s undrawn banking facilities of about R400-million, will position Mpact to remain well capitalised through these uncertain times.
The company notes that Mpact falls into one of the critically required sectors exempt from the lockdown as it is one of the critical links in the South African economy’s supply chain, producing paper and packaging for food, pharmaceuticals and other essential products.
Based on the current information at its disposal, Mpact has deduced that it falls within the categories of businesses which are required to remain open during the lockdown to fulfil a vital link in the essential services value chain.