Troubled WP Stewart & Co has suspended its dividend in a bid to ease its cash flow situation.

The Bermuda-based asset management company suffered first quarter losses this year of $1.8 million or four cents a share after taking a one-time charge of $5.8 million to deal with the termination of the contracts of certain employees.

And, in order to ensure sufficient cash resources to complete the successful turnaround in its business, it announced the suspension of the regular quarterly dividend payment to common shareholders.

Commenting on the decision taken by the board of directors, Bill Stewart, chairman and CEO, said: "We are about eight months into a one to two-year turnaround programme, and the principal challenge is that it takes time to do it right.

"We've essentially completed the addition of strong, experienced people in most key positions; the integration of our global research and portfolio management activities and the substantial broadening of our product line.

"Investment performance is improving and we have reduced operating expenses."

He insisted the company was still working towards facilitating a better cash flow and believes that the move to suspend its dividend will reap its rewards in the future.

"We continue to generate positive cash flow, but we expect it will take some time before the impact of these changes takes full effect," he said.

"The board's action is to ensure the company has the cash resources necessary to continue building out our global franchise, including exploring possible strategic opportunities."

The company, which is headquartered in Hamilton, has provided research-intensive equity management services to clients throughout the world since 1975 and has additional operations and affiliates in the US, Europe and Asia, as well as being listed on the New York and Bermuda Stock Exchanges.