The Marshalls Group continues to follow a progressive dividend policy aimed at achieving up to 2 times earnings cover over the business cycle. For the current year, the Board is recommending a final dividend of 9.65 pence per share (2018: 8.00 pence per share) which, together with the interim dividend of 4.70 pence per share (2018: 4.00 pence per share), makes a combined dividend of 14.35 pence per share (2018: 12.00 pence per share), an increase of 20 per cent for the year.
The Board is also recommending a supplementary dividend of 4.00 pence per share for 2019 (2018: 4.00 pence per share). The aim continues to be to maintain a degree of flexibility within their dividend strategy by utilising discretionary supplementary dividends commensurate with free cash flow and after considering future group capital requirements. The payment of this supplementary dividend provides increased returns for shareholders whilst at the same time recognising an appropriate degree of caution and stewardship.
Subject to shareholder approval at the Annual General Meeting, the final ordinary and supplementary dividends will be paid on 30 June 2020 to shareholders on the register on 5 June 2020. If approved by shareholders, the total dividend for the year will be 18.35 pence per share (2018: 16:00 pence per share).
Other financial highlights include:
Revenue growth of 10% to £541.8 million (2018: £491.0 million)
Continued improvement in operating margins which increased to 13.4% (2018: 13.2%)
Profit before tax up 11% to £69.9 million on a reported basis (2018: £62.9 million)
ROCE improved to 23.7% (2018: 21.9%) on a pre-IFRS 16 basis and on a reported basis was 21.4%
Reported EPS up 12% to 29.36 pence (2018: 26.29 pence)
Edenhall performed well in the period and its operational integration is complete
Strong cash generation has continued with operating cash flow at 96% of EBITDA
Net debt of £18.7 million (2018: £37.4 million) on a pre-IFRS 16 basis
Reported net debt of £60.0 million, after the inclusion of £41.3 million of IFRS 16 lease liabilities
Recommended supplementary dividend of 4.00 pence per share made possible by strong cash management