Join our daily newsletter At The Bell to receive exclusive market insights
- Australian retailer Vita Group (VTG) has released an update as concerns grow surrounding COVID-19
- A Business Continuity Plan (BCP) has been enacted to address key areas of impact and risk
- “Robust performance” in the first half of FY20 is expected to taper off as the company experiences a reduction in footfall and revenue
- The company has also said that it will scrap its previously announced interim dividends of 5.3 cents per share
- Shares in Vita Group are down 11.1 per cent to trade for 64 cents
Australian retailer Vita Group (VTG) has released an update to investors as concerns grow surrounding the COVID-19 outbreak.
The company specialises in enhancing customer experience across a wide range of brands. With more than 1,700 employees and over 120 points of presence nationwide, Vita generated $753.7 million in revenue over the 2019 financial year.
Today’s announcement revealed the enactment of a Business Continuity Plan (BCP), which will address pivotal areas of impact and risk relating to the virus. Factors include health and safety, continuity of service to customers, supply of stock and financial impacts.
Despite “robust performance” for the first half of financial 2020, Vita is expecting a drop-off in both footfall and revenue for the rest of the year. As such, the company has said that it’s unable to offer any guidance for the year at this point.
All of Vita Group’s customer-facing outlets and digital stores are currently open. The company is also working with its strategic partner, Telstra, to manage any impacts to its store network.
Due to the widespread uncertainty regarding the virus, Vita has also announced it will cancel its planned dividend distribution. Earlier this year, the company announced that it would issue interim dividends of 5.3 cents per share, to be paid on April 9.
Maxine Horne, CEO of Vita Group, acknowledged that the news would be a disappointment to investors.
“These are unprecedented times and we are adapting our business to manage the risks and impacts relating to COVID-19.
“I can understand that the decision to cancel the interim dividend may be disappointing to some shareholders, however, it is a necessary action in a difficult and uncertain environment, and one that is aimed at protecting our business for the long term,” she said.
Shares in Vita Group are down 11.1 per cent to trade for 64 cents at 11:19 am AEDT.
