Hey there,
Chesswood is a North America equipment financing company. Although it has operations both sides of the border, it derives the majority of revenue from the U.S.
COVID-19 mitigation efforts have not been kind to the company as they hit Chessword at the heart of its target market - small-to-mid sized businesses. Arguably, the SMB segment has been the most economically impacted by COVID-19 shutdowns.
Not surprisingly, Chesswood's financials are being materially impacted. In the company's Pawnee and BlueChip segments, 24% and 15% respectively have locked in rent deferral options. It also booked $15 million in provision for credit looses and a 12% impairment on its investment in BlueChip. The company also suspended new financing in the U.S. - so business essentially came to a halt. Canada remains open but new financings are under strict guidelines.
It is thus not surprising that the company has slashed management salaries by 20%, cut the dividend by 50% in late April and then proceeded to completely suspend the dividend in May.
On the bright side, as the economies begin to re-open it will be resuming new funding in the U.S. How long will it take to return to 'normal' remains unknown. A second wave of either prolonged or new shutdowns can also significantly impact the company once again. As mentioned this pandemic has been particularly hard on SMB which is Chesswood's target market.
Mat