Greggs cancels dividends as sausage roll seller prepares for further lockdowns

High Street pasty seller Greggs has decided not to payout last year's dividend as the company prepares to preserve cash in the wake of the coronavirus crisis.

The company said it would not pay 2019's dividend and instead preserve the £33 million in cash.

Greggs also has no plans to pay a dividend for 2020 either, with balance sheet stability being the firm's number one priority at the moment.

The company said: "The strength of our balance sheet coming into this period meant that we had sufficient time to arrange additional liquidity, and the Bank of England's Covid Corporate Financing Facility (CCFF) proved to be the quickest method of arranging temporary financing.

"At the same time, we took actions to protect our cash position, including the cancellation of the planned final dividend for 2019, furloughing most of our team, cancelling annual pay increases, taking voluntary Director salary reductions and freezing all but essential expenditure.

"The receipt of valuable Government support in the form of business rates relief and the Coronavirus Job Retention Scheme allowed us to maintain employment of our furloughed colleagues at full pay during the lockdown phase."

The warning comes as the company said it had mapped out worst case scenarios should coronavirus outbreaks take place once again.

Greggs said: "In these downside scenarios the Company would need to continue to access the liquidity available under its CCFF, or alternative facilities. The Board is in discussions with commercial banks to establish additional facilities in the near term.

"It remains very difficult to predict the outlook and likely performance of our business, and we recognise the possibility of further lockdowns either nationally or regionally."

The company recorded a steep fall in half year sales and swung to a pretax loss of £65.2 million, from a profit of £36.7 million last year.