The Breedon Board believes that, given the Group's scale, level of maturity and cash generation, this is the right time to implement a structured cash return to shareholders in the form of a committed and progressive dividend policy.
The Board is confident that the payment of a dividend will not compromise the Group's ability to execute on their strategic objectives and Breedon's capital allocation priorities remain unchanged. They will continue to prioritise the strong balance sheet that allows them to invest in our asset base such that their business is able to take advantage of market opportunities and will pursue selective acquisitions in order to accelerate their strategic development.
Their first interim dividend of 0.5 pence per share will be paid on 10 September 2021, to shareholders on the register on 13 August 2021. The cash cost of this first interim dividend is expected to be £8.4 million. They expect that, subject to shareholder approval, the final dividend for the 2021 full year will be not less than 1.0 pence per share, giving a total dividend of not less than 1.5 pence for 2021.
Subject to trading conditions and continued sustained cash generation, the Group intends to adopt a progressive dividend policy that targets a payout ratio of 40 per cent of underlying earnings per share over time.
Future dividend payments by the Group are not guaranteed and will be determined by the Board in light of the facts and circumstances at the time.
Other financial highlights include:
Strong trading performance supported by recovery in construction activity
Growing momentum in Ireland despite partial lockdown of construction sector
Like-for-like Revenue 17 per cent and Underlying EBIT 9 per cent ahead of H1 2019
Integration of CEMEX Acquisition ahead of schedule
Sustainability strategy developed; KPIs and targets to be published in the autumn
Leverage reduced to 1.2x at end of June, within 12 months of CEMEX Acquisition
Refinancing completed; diversifying sources of credit and extending maturity profile
Underlying EBIT for 2021 now expected to be at the top end of market expectations