Accell Group has announced that it will be withdrawing a dividend proposal and scale back production at its facilities. The decision was taken in light of the impact of the COVID-19 pandemic on economic activity and bicycle markets, and the uncertainty regarding the length and depth of the outbreak,
In a press release, the company stated that the delay in component delivery from Asia combined with the effect of lockdowns, resulting in bike shop closures and a drop in demand across Europe, has caused it to proactively cut costs and manage for cash. The group has thus scaled-down bicycle production capacity by nearly 70%. However, parts and accessories business has not been affected.
The withdrawal of the 0.30 euros per ordinary share dividend is part of a package of managerial measures taken to ensure business continuity for the coming period. Accell hopes the measures will partly offset the anticipated very negative impact of the COVID-19 outbreak on its net turnover and profit in the first half of 2020.
Additionally, Accell Group is in close and contact with its syndicate banks to keep them informed of the impact of the pandemic on its business and financial position. It intends to draw €50 million under the existing accordion facility to its term loan (increasing it to €125 million).