The decision by Rightmove to cut its fees to all agents and developers during the Coronavirus crisis by 75% has cost its shareholders dearly after the portal this morning announced it is to cancel its proposed final dividend payment of 4.4p per share for 2019.
This follows a torrid few weeks for the company’s share price, dropping since February from a high of £6.35 per share to a low of £4 a few days ago. So far some £1.27 billion has been wiped off its value, although its share price has since rallied in recent days.
This morning’s announcement, which will save the company £38 million, means one of the City’s most reliable and lucrative shares has not paid a dividend for the first time since they were launched in 2006.
Rightmove’s shares are one of the wonders of the London Stock Exchange and to a certain extent the global financial system and its share price fluctuations are discussed around the world.
Rightmove says the move is part of a package to contain its costs and ‘reinforce our financial position’.
Other measures include suspending its share buy-back scheme which has seen it spend millions every week re-acquiring its own stock, and looking at the size of its future dividend payments.
“In this period of unprecedented uncertainty, we are unable to quantify the impact of COVID-19 on our financial and trading performance at this stage,” Rightmove says.
“Accordingly, the Group is suspending all existing financial guidance for 2020. The Board is confident that the Company has the financial capacity to withstand this challenging period.”