ICI cuts dividend after loss

Press, 28 February 1981, Page 19

ICI cuts dividend after loss

PA London:' Britain’s largest manufacturing company, Imperial Chemical Industries (ICI), has an- i nounced a loss for the second half of 1980 and said it was ; cutting its dividend payment < to shareholders for the first : time in more than 40 years. i The ICI announcement, a further sign of Britain’s grim ; recession, sent shock waves <

-through the stock market, and the company’s shares plunged to 268 p from 292 p. Several other leading shares also fell. ICI is regarded by investors as a pillar of the British economy, and its fortunes are seen as mirroring those of industry as a whole. The company has suffered a steep fall in demand because of the world-wide ec-

onomic slump, and its exports have been hurt by the strength of the pound sterling. The climb of the pound has also brought anguished complaints from other British firms. ICI said that its total pretax loss in the second half of 1980 was £I6M compared with a profit of £3OOM in the same period of last year. The company said that the outlook for the immediate future was also poor, and that it was cutting its final dividend payment from lip a share to sp. . This is the first time that ICI has failed to increase or at least maintain, its dividend since 1938. Its shares are widely held by both individuals and institutions. ICI was profitable in the

early part of last year before ■ a swift collapse in its performances, and in 1980 as a whole it made a pre-tax proof £2B4M a little less than half its profit in 1979. However, after taxation and a £ISOM extraordinary charge to cover disposals anil losses caused by the recession, ICI made an attributable loss in 1980 of £2OM. ICI said that its heaviest losses were in fibres, petrochemicals, and plastics. Demand for these goods has been hit hard by recession, while the cost of making them has increased swiftly because of rising oil prices. All the world’s leading chemical companies have suffered a similar profit squeeze on these products in recent months.