IBI Group announces suspension of quarterly dividend
TORONTO – IBI Group Inc. (the “Company”) (TSX: IBG) has announced after careful consideration that the quarterly dividend on its common shares for the quarter commencing March 1st, 2013 and henceforth will be suspended, effective immediately. The distributions on the 5,025,778 Class B units of the IBI Group partnership (which are exchangeable for common shares), held by IBI Group Management Partnership, will similarly be suspended with respect to the quarter commencing March 1st 2013 and henceforth.
This decision is based on the Company’s commitment to manage cash to strengthen its balance sheet and manage its operations through a difficult period. The recession that occurred in the fourth quarter of 2008 and its impact on the economies of the United States and Europe, affected IBI Group initially in the housing sector, in which IBI had relatively high exposure. IBI projects in social and transportation infrastructure have also been affected. Europe continues to contract, recovery in the United States is encouraging but tentative, and a slowdown is being indicated in the Canadian economy.
The Company has reduced, and will continue to reduce, staff in line with committed work to enhance productivity and profitability, as indicated previously. This, together with the suspension of the dividend will preserve cash for operations and to reduce debt.
The backlog of committed work continues to increase and the Company had positive cash flow in April and in May.
The Company will continue to closely monitor profitability and cash generated. It will revisit the dividend/distribution policy as the Company moves into solid and sustainable operations and an improved balance sheet.