Ibstock 2017 dividends and supplementary dividend policy
Final dividend of 6.5 pence per share (2016: 5.3 pence per share) making the 2017 full year dividend 9.1 pence per share (2016: 7.7 pence per share)
A final dividend of 6.5 pence per ordinary share (2016: 5.3 pence) is being recommended for payment on 8 June 2018 to shareholders on the register at the close of business on 11 May 2018. This is in addition to our interim dividend paid in September 2017 of 2.6 pence per ordinary share (2016: 2.4 pence), resulting in a total dividend of 9.1 pence per ordinary share - 18.1% higher than the prior year (2016: 7.7 pence). This is in line with our dividend policy, which is based on a pay-out ratio of 40-50% of adjusted profit after taxation over a business cycle. In 2017, the Directors have selected a 42.5% pay-out ratio in determining the proposed dividend (2016: 42.5%).
Supplementary dividend policy
In light of the Group's strong adjusted free cash flow, the Board has reviewed its capital allocation strategy and whilst preserving the necessary flexibility to accommodate potential acquisition opportunities and consistent with its objective of maintaining a prudent balance sheet, has determined a supplementary dividend policy. This will assess the Group's capacity for supplementary dividends annually, in light of our reducing net debt to adjusted EBITDA multiple and, if declared, will be of a similar scale to the prior year final dividend and paid alongside the Group's interim dividend. Subject to market conditions and capital allocation priorities, the first supplementary dividend is expected to be announced in August 2018 for payment alongside the 2018 interim dividend.