Marks & Spencer has secured fresh funding as it moves to shore up its balance sheet during the coronavirus crisis.
The high street stalwart plans to borrow cash through the government’s Covid Corporate Financing Facility and has also reached an agreement with its banks to “substantially relax or remove covenant conditions” on its existing £1.1bn credit facility.
M&S said the moves will “secure liquidity” for the duration of the coronavirus crisis and “underpin the recovery strategy and accelerated transformation” during 2021.
The retailer admitted that the health emergency has meant its clothing and home business would be “severely constrained” by lockdown and warned that there were likely to be “highly uncertain trading conditions” during a “prolonged exit period” from those government measures.
Although it did not provide a forecast, M&S said it was planning for “materially subdued trading” throughout the remainder of 2020 in its clothing and home division.
M&S said that trading in its food business had also been “adversely affected by lockdown due to the closure of cafes” and slump in footfall to some of its city centre locations.
As a result, M&S said it “does not at this stage anticipate” paying a dividend for the 2020/21 financial year. It said that would generate a cash saving of £210m.
M&S is due to publish its full-year results for 2019/20 on May 20, when it also plans to provide an update on measures being taken to accelerate its transformation plan.
The retailer said it will “change ways of working permanently” under its ‘never the same again’ programme, which it is preparing to implement in the wake of the coronavirus crisis.
No comments yet