Investors have given Pacific Brands the thumbs down after the company yesterday confirmed that it was slashing the 2009 dividend by 65%.
The shares closed at an all time low of 55c, down 6%, or 3.5c from Monday’s previous all time low of 58.5c.
Monday’s low was a reaction to the dividend cut being raised and yesterday’s slump was a reaction to the decision: the overall market was off less than 1%, so the vote of no confidence was far more forceful yesterday.
The knickers, t-shirts, shoes and uniform group warned that it was looking at a cut on Monday; this morning it revealed the size of the chop in this statement.
"The board believes that maintaining a dividend of 17 cents per share is not appropriate in the current environment," the company told the ASX.
"Given increased uncertainty, the board has determined that it is in the best interests of shareholders to preserve capital and repay debt."
Pacific Brands plans to pay shareholders a first half dividend of 3c a share (normally 8.5c) and a similar amount in the second half.
That would take the total pay out for the year to about six cents, well down from 17c in 2007-08.
Pacific Brands also said it will underwrite its dividend reinvestment plan (DRP) for shareholders for at least the next two dividend payments.
It will also focus on restructuring its business to improve efficiency.
"The board’s decision to make changes to our dividend policy and introducing an underwriting of our DRP is a prudent and pragmatic response to the continuing decline in market conditions," chief executive Sue Morphet said in a statement.
It shouldn’t be that hard for Fairfax to cut its 20c a share pay out by a similar amount, from 20c to around 7.5c a share.
And in a separate announcement Harvey Norman revealed its best weekly sales figures form more than two months.
The retailer, which has been struggling with falling sales and margins, told the ASX that same store written sales rose 1.2% in the week to Sunday, December 7. That was after a smaller positive rise the week before.
Harvey Norman had experienced around six weeks of falling sales up to the week ending November 30.
