Flight Centre cancels dividend and cuts exec pay
EMBATTLED Brisbane-based Flight Centre has cancelled its interim dividend and directed executives to take a 50 per cent pay cut as it confronts unprecended restrictions in the travel sector.
The company aid the cancelled dividend, worth 40¢ per share and a total of $40 million, was supposed to be paid to shareholders in April.
"Cancelling the dividend was not a decision that was taken lightly, but we felt it was appropriate to preserve cash and protect long-term shareholder value," said Flight Centre managing director Graham Turner.
Flight Centre shares have also been suspended from trading, following a two-day trading halt last week, as the company scrambles to develop a comprehensive response to travel restrictions being implemented by governments worldwide. Authorities in Australia are advising against non-essential domestic travel in addition to restrictions on international travel.
Flight Centre added that it is discussing support packages with the government for businesses and people that are adversely impacted by the travel restrictions.
"The escalating government-imposed restrictrictions are significantly impacting us and all travel and tourism businesses," said Mr Turner in a letter to shareholders and customers which he signed off with his nickname Skroo.
"To lower costs our senior leadership team (task force) will give up 50 per cent of their salaries," he said.
He said the company would continue to pursue options that would help it preserve jobs for the long term.
"We have been heartened by recent government announcements, particularly in the United Kingdom where the government has outlined 80 per cent wage subsidies for affected workers," he said.
Flight Centre shares were trading at $9.91 before they were placed on hold last week.
Originally published as Flight Centre cancels dividend and cuts exec pay