Blow for Burberry investors as £120m dividend is axed

BURBERRY became the latest blue-chip company to cancel its dividend in an attempt to absorb a £241m hit from the pandemic.

The luxury retailer ditched a payout worth £120m, hammering investors who have now endured almost £31bn of lost dividends from listed firms since the outbreak.

Almost half the firms in the FTSE 100 have cut or axed payouts, with Burberry becoming the 46th, according to analysts at AJ Bell.

Burberry – which features model Bella Hadid in its latest advertising campaign ( pictured) – also became the latest retailer to spell out the devastating impact of Covid-19. It took a £241m one-off charge related to the virus, including £68m for the clothes mountain which will need to be sold at a discount. There was also a £157m writedown on its 465 global stores, half of which are closed.

Its factory in Castleford, Yorkshire, is out of action, having been adapted from making trench coats to churning out surgical masks and gowns.

In the year to the end of March, which barely takes account of the European lockdown, revenues fell 3pc to £2.6bn, contributing to a 62pc slump in profits to £169m. It shut most stores in mainland China in February, and was affected by protests in Hong Kong.

It reported a like-for-like drop in sales of 27pc in the first three months of the year – worth about £170m – following growth of 4pc in the last nine months of 2019.

Yesterday it confirmed it had borrowed £300m via the UK Government’s business support scheme.

Finance chief Julie Brown said: ‘The virus has clearly changed the world and the way people conduct their lives.’

Trading post-lockdown was looking promising as sales in China and Korea in the last seven weeks outperformed the same period in 2019. Its UK shops are expected to open from June 1.