Retailer Suspends Dividends, Secures Funding for Recovery Strategy
- Marks and Spencer suspends dividends for the 2020/21 financial year
- Secures funding through relaxed financial conditions with lending banks
- Expected cash saving of £210m from not paying dividend
- Eligible issuer under government’s Covid Corporate Financing Facility
- Preliminary full-year results on 20 May with cost reduction measures update
- Transformation programme to change ways of working in progress
Marks and Spencer has announced that it will not pay a dividend for the 2020/21 financial year to maximize its liquidity, expecting a cash saving of around £210m. The retailer has also reached an agreement with its lending banks to relax or remove certain financial conditions for its £1.1bn overdraft facility until September 2021 and is now an eligible issuer under the government’s Covid Corporate Financing Facility. The company expects that these measures will underpin its recovery strategy and accelerated transformation in 2021. The retailer’s clothing and home business has been severely constrained during lockdown, while its food business faces challenges due to cafe closures and reduced footfall. Preliminary full-year results are scheduled for May 20th with a cost reduction update.
Factuality Level: 9
Factuality Justification: The article provides accurate information about Marks and Spencer’s decision to not pay a dividend for the 2020/21 financial year, its agreement with lending banks, and its eligibility under the government’s Covid Corporate Financing Facility. It also mentions the expected cash saving and the retailer’s plans to report preliminary full-year results and implement cost reduction measures. The article is informative without any significant issues related to digressions, misleading information, or personal opinions.
Noise Level: 3
Noise Justification: The article provides relevant information about Marks and Spencer’s financial decisions during the pandemic, including not paying a dividend, reaching an agreement with lending banks, and being eligible for the government’s Covid Corporate Financing Facility. It also mentions the impact on its clothing and food businesses. However, it lacks in-depth analysis or actionable insights.
Financial Relevance: Yes
Financial Markets Impacted: Marks and Spencer’s decision to not pay a dividend, agreement with lending banks, and eligibility for the government’s Covid Corporate Financing Facility impact its financial situation and liquidity.
Financial Rating Justification: The article discusses Marks and Spencer’s efforts to maximize its liquidity by not paying a dividend, reaching an agreement with banks, and becoming eligible for the government’s Covid Corporate Financing Facility. These actions directly relate to their financial position and are likely to have an impact on the company’s financial performance and market value.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the text, but the article discusses the impact of the pandemic on Marks and Spencer’s business operations.
www.retailsector.co.uk 
