Kingspan shares fall as company moves to slash wages and scrap shareholder dividend

Shares in Irish-based building insulation specialist Kingspan fell as much as 6% on the back of its plans to slash workers’ salaries and scrap its shareholder dividend in a bid to maintain financial discipline as the fallout from the spread of the Covid-19 virus continues.

In a letter to staff, seen by the Irish Examiner, the Cavan-headquartered business said staff pay will be cut by 40% across April and May and senior executives will take a 50% pay cut.

In the letter, group CEO Gene Murtagh said in some countries affected by the virus, Kingspan is experiencing “severe and unprecedented” disruption in production and customer demand.

“The situation is highly volatile and unpredictable,” he said. Mr Murtagh said his greatest concern is to “safeguard the future of as many jobs as possible”.

No jobs will be cut at the moment. All non-critical business spending will also be frozen for two months, Kingspan said.

Kingspan has also scrapped its plan to pay a final dividend of 33.5c per share to shareholders on the back of its 2019 performance, due to the “unprecedented challenges” presented by the Covid-19 outbreak and the “significantly changed” global trading environment.

The move is aimed at weathering the early effects of the virus storm. Kingspan has over €1bn in cash and undrawn bank loans. Last month it reported a 7% rise in annual revenue to €4.7bn and a 12% jump in profit to €497m.

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