As highlighted in the Annual Report and Accounts for the year ended 31 March 2020, the Electrocomponents Board deferred the decision on the final dividend for that year until the impact of COVID-19 on activity levels and cash generation in the Group's key markets had become clearer. They have stated that the Board recognised the importance of its progressive dividend policy to its shareholders and would therefore review making an additional interim dividend payment related to the year ended 31 March 2020 at the Group's half-year results in November 2020.
In November 2020, as a result of the resilience the Group had demonstrated, their robust trading position and strong balance sheet, and after due care and consideration, the Board decided to pay a final dividend for the year ended 31 March 2020 at the same level as the March 2019 final dividend of 9.5p per share. As it was no longer possible for this dividend to be approved by shareholders at the Annual General Meeting, it was paid as an additional interim dividend for the year ended 31 March 2020 in December 2020. An interim dividend for the year ended 31 March 2021 of 6.1p per share was paid in January 2021, equivalent to approximately 40% of the prior year full-year dividend.
The Board proposes to increase the final dividend to 9.8p per share. This will be paid on 23 July 2021 to shareholders on the register on 18 June 2021. As a result, the proposed full-year dividend for 2020/21 will be 15.9p per share (2019/20: 15.4p), representing an increase of 3.2% over the 2019/20 full-year dividend. Adjusted earnings dividend cover for 2020/21 was 2.0 times.
The Board intends to pursue a progressive dividend policy while remaining committed to a healthy dividend cover over time by driving improved results and stronger cash flow. In the normal course, the interim dividend will be equivalent to approximately 40% of the full-year dividend of the previous year.
Other financial highlights include:
Growth driven by improving momentum throughout the year and strong market share gains
Revenue growth of 2.5%, with like-for-like up 1.4%, reflecting strong market share gains in all key markets
Superior availability, product and service solutions and being digitally-enabled has driven Group outperformance
RS PRO like-for-like revenue growth of 9.7%, due to greater brand awareness and new product development
Web revenue grew 2.4% with total digital revenue accounting for 63% of Group revenue
Three strategic acquisitions performing in line with expectations, with integration and cross-selling on track
Despite external challenges our Group Net Promoter Score remains high at 54.4 (2019/20: 55.7)
They continue to improve their environmental, social and governance journey (ESG), driving higher external ratings
Profitability affected by additional costs relating to COVID-19, Brexit and inventory provisions
Gross margin of 42.7%, down 1.0 pts relating to increased freight costs, inventory provisions and regional mix
Operating costs included c. £19 million relating to COVID-19 and Brexit due to higher freight and cost to serve
RISE programme to simplify and streamline the Group delivered £7 million of cost benefits
Adjusted operating profit margin down 1.9 pts to 9.4% due to gross margin reduction and additional costs
Adjusted profit before tax fell 17.0% on a like-for-like basis, profit before tax lower by 19.5%
Adjusted EPS decreased 17.0%, down 18.4% on a like-for-like basis; EPS fell 20.2%
Growth in full-year dividend supported by strong balance sheet and cash flow
Strong adjusted free cash flow generation of £145.4 million driven largely by their focus on conserving cash
Balance sheet strength, net debt to adjusted EBITDA of 0.5x supports, organic and inorganic strategic expansion