With an improving outlook, and strong cash flow, the Board is has announced they will reinstate dividends, and has declared a 6% increase in the interim dividend to 3.15p per share (H1 2019/20: 2.97p per share).
The Board believes that, as an acquisitive growth company, maintaining a progressive dividend policy with a long term dividend cover of over 3 times underlying earnings is appropriate to enable both dividend growth and a higher level of investment from internally generated resources.
Other financial highlights include:
Resilient trading during pandemic reflects strength of the operating model and target market focus
o Group sales declined by 8% organically with target markets performing ahead of wider markets
o Group operating expenses reduced by 4% organically (7% reduction from H2 2019/20 run rate)
o Underlying operating profit 11% lower
o Underlying earnings per share reflecting lower profits & the equity issuance in H2 2019/20
o Increasing order momentum since Q2, returning to organic growth in September
Excellent cash generation leading to resumption of dividend and acquisitions
o £43m of free cash flow(7) in the last 12 months up 63% on prior period and 174% of post-tax profit
o Gearing(8) reduced to 1.0x at 30 Sept 2020 from 1.6x(8) in the last 12 months