Computacenter has suspended dividend payments to shareholders after furloughing one in ten workers, the lion's share of which include engineers, project managers and consultants unable to visit customers on site.
In an update to the London Stock Exchange, the listed services-based reseller, one the largest across Europe, said group revenue for the first calendar quarter had "reduced slightly" on a year ago but described them as "pleasing given the current conditions".
Computacenter said today – as we touched upon last month – that it had seen more "robust" trading than expected as businesses reacted to COVID-19 by asking staff to work from home, even before the UK government imposed a lockdown on 23 March.
"There has been a marked difference in need from customer to customer dependent on which sector their business is in. There has been a surge in demand from many of our customers to enable business continuity particularly around home working and network resilience.
"Conversely, particularly in the industrial sector, where a large number of our customers have had to cease production, our engineers and consultants are unable to work. To mitigate the cost of carrying these staff, but retaining them for the long term, we have placed approximately 10 per cent of Computacenter's employees across Europe, on wage subsidy programmes utilising various government initiatives."
Around 15,000 people are employed by the group, and due to the furloughing, Computacenter has rightly cancelled the payment of a final dividend for 2019, saying it was "prudent" to do so. "The company will continue to monitor the current crisis and resume distributing cash to shareholders as soon as it is appropriate," it said.
The move comes as firms applying for a piece of Denmark's aid package to help companies during the coronavirus have been told that if they accept aid, they must promise not to pay dividends or make share buybacks in 2020 and 2021. France has said it plans to do the same, with economy minister Bruno Le Maire telling a local TV station: "A company that does not have sufficient funds to pay its tax and social security charges does not have the cash to pay its shareholders," and calling on companies "to show a sense of civic responsibility". Both Denmark and Poland, meanwhile, have said that companies registered in tax haven countries will no longer be eligible for aid.
Computacenter CEO Mike Norris and CFO Tony Conophy have agreed to forgo their salary for calendar Q2, and the company said efforts to preserve cashflow and cash in the bank are being further explored "in light of the heightening macro-economic uncertainty directly related to the COVID-19 crisis and its duration". And customers are feeling the squeeze of the virus, it added.
"The company has received, and approved, a number of requests for extended payment terms and continues to look for way to support the short term cashflow of our smaller customers or those customers that have beeb materially affected by the impact of COVID-19."
Tech vendors including HPE, Cisco, Dell and others are all promoting a buy-now-pay-later process to keep customers spending during the pandemic.
Though sales of PCs, VPNs, WANs, online collaboration tech and cloud services have shot up, the flip side has seen some classic enterprise hardware slide.
Computacenter said it "wouldn't surprise us to see a short-term dip in demand, as enterprises return to work" but it reckoned the "need to invest in technology and in particular a robust IT infrastructure has been brought in to clear focus by recent events".
The rest of the industry must be hoping for the same outcome. ®