Information regarding the impact of COVID-19 and dividend cut by Awardit AB (publ)
Awardit Group ("Awardit") has experienced a strong development during the first quarter of 2020, but now sees that the effects of COVID-19 among customers and suppliers also affect Awardit. Therefore, due to increased uncertainty about the ongoing development and the completed purchase of Goyada AB's bankruptcy estate, the Board of Directors proposes that the ordinary dividend payout for 2019 will be cut in its entirety.
Awardit has experienced strong development during the first quarter, with sales growth and a significant improvement in EBITA compared to the same period last year. In the B2B area, no effects of COVID-19 are yet to be seen, but within B2C, after an initial positive effect, we have now been able to detect a negative external impact. A customer has chosen to temporarily limit the withdrawal of bonus points in their loyalty program, which temporarily affects Awardit's sales and earnings. At the same time, many cinemas are closed, which has resulted in a declining interest in, and sales of, digital cinema tickets. The same goes for different hotel vouchers. Alternative products have been developed and offered in all programs, but it takes time to work up the volumes for these. It is still too early to quantify the impact of the aforementioned changes on the revenue and profit, but management believes that they can be significant if this continues for an extended period of time. Cost-saving measures have been initiated and more are evaluated continuously by management.
Against the background of the COVID-19 effects and the acquisition of Goyada AB's bankruptcy estate, the Board of Directors proposes that the previously proposed dividend for the financial year 2019 of SEK 15 million be completely abolished. The dividend cut gives Awardit a greater scope for action and increased flexibility during this volatile period where interesting business opportunities can also emerge.
We have noticed now that a couple of Awardit's customers were negatively affected by the COVID-19 effects while other customers see an increased need for their products and services. My experience is that in bad and troubled times, companies are investing more in customer loyalty and we have received several new inquiries in the past two weeks. It is also interesting that the loadings of gift cards on the Retain24 platform have increased during March. Gift cards can be a very good product for companies in commerce and the hospitality industry to even out revenues and improve their liquidity in this prevailing climate.
says Henrik Olander, VD Awardit.