One of the first housebuilders to announce the closure of its sites yesterday, Springfield later revealed it has decided to withdraw the proposed interim dividend of 1.4 pence per share (amounting to a saving of £1.4m), announced on 27 February 2020.

While the group said it “maintains a strong financial position”, it cited a “rising level of uncertainty” caused by the pandemic.

The company said: “The board recognises the importance of the dividend to shareholders, but believes that this is an appropriate and prudent measure to preserve liquidity in these uncertain times. The board will consider the quantum of any final dividend for 2019/20 in light of the position and outlook of the group at that time.”

Springfield, which floated on the AIM in London in 2017, said net debt was £56 million and it has a £67m credit facility with the Bank of Scotland.

Despite an “encouraging” start to the financial year, Persimmon said it is preparing for a “significant delay in the timing of legal completions, a rise in cancellation rates and a material slowdown in new sales, the extent and duration of which is uncertain”.

The company stated: “In light of the current uncertainty caused by the COVID-19 virus and its operational impact on UK economic activity, and in line with the group’s strategy of minimising the financial risk through the cycle, the board believes that conserving cash and maximising financial flexibility is in the long term best interests of the business and all its stakeholders.

“Accordingly, the board of Persimmon has decided to: (i) cancel the proposed 125p per share interim dividend payment of surplus capital to shareholders on 2 April 2020; and (ii) to postpone the proposed annual, final dividend payment of 110p per share on 6 July 2020 and reassess it later in the calendar year when the effects of the virus will be clearer.

“Whilst the company’s regular annual payment of at least 110p per share has been stress tested for payment through the housebuilding industry cycle, the Covid-19 virus presents an exceptional set of circumstances.”

Dave Jenkinson, group chief executive, added: “Our primary concern is the safety and well-being of our customers, staff, contractors and suppliers and we have today set out a number of further measures throughout the business to protect them for the duration of the pandemic.  We will listen carefully to the government’s future advice as the situation develops and will make further adjustments where necessary.

“The group’s long-term strategy of minimising financial risk and maintaining capital discipline over the long term through the housing cycle, ensures that we are well placed as we enter this period of uncertainty.

“Whilst the impacts of this pandemic go beyond the normal cyclical nature of the housing market, the group’s high quality land holdings, significant liquidity and strong balance sheet will allow us to work through these challenges and emerge in a strong position for the benefit of all our stakeholders.”

Elsewhere, Morgan Sindall said it made the decision as it expected the coronavirus crisis to have a material impact on this year’s profits.

John Morgan, chief executive of Morgan Sindall, said: “These are clearly challenging times and we continue to take the appropriate action to mitigate the impact of COVID-19.

“The group remains well funded, with good cash liquidity and an order book of £7.6bn, underpinning our confidence in the group’s long-term prospects.”

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