The Warehouse explains NZX mishap, cancels dividend
WELLINGTON: The Warehouse Group says it acted in ‘‘good faith’’ when it told the NZX on Tuesday that its Red Shed Warehouse stores would remain open during the fourweek lockdown.
In a statement released to the NZX on Thursday, Warehouse Group chief executive Nick Grayston said: ‘‘With the information we had to hand we understood that our significant grocery, toiletries, cleaning, warmth essentials for winter needs and our national coverage meant that we were expected to trade.’’
Mr Grayston said the company later found out that it did not fall under the Government’s definition of an essential service.
‘‘When we confirmed The Warehouse (Red Sheds) would be open, we did so in good faith on the basis of the information we had been given from credible sources, and our strong belief, supported by legal advice, that Red Sheds met the criteria of being an essential service,’’ he said.
The company’s shares did not trade on Wednesday after it was placed into a trading halt on Tuesday afternoon. Its shares were up by as much as 42% at one stage following the announcement on Tuesday morning.
The Warehouse will now cancel the payment of its dividend of 10 cents per share for the first half of the year, which was due to be paid out on April 17.
‘‘Considering the circumstances and uncertainty around the impact of Covid19, the board of the group has decided that it is in the best interest of the company to cancel the interim dividend,’’ the company said in a statement.
On Tuesday, following the company’s announcement to the stock exchange, Ministry of Business, Innovation and Employment deputy chief executive Paul Stocks told media the Government had not provided The Warehouse with an exemption of trade to operate during the Level 4 lockdown.
The group could not face a fine of up to $500,000 for the hasty market announcement if it is found to have breached the NZX’s continuous disclosure rules. — The New Zealand Herald