The Grafton Group Board is recommending a final dividend for 2023 of 26.0p (2022: 23.75p) per ordinary share in line with its progressive dividend policy. An interim dividend of 10.0p (2022: 9.25p) per share was paid on 20 October 2023. The total dividend for the year is 36.0p per share, an increase of 9.1 per cent on dividends of 33.0p paid for 2022.
The cash outflow on this year's final dividend is based on the cash outflow of £51.6 million on last year's final dividend. Notwithstanding the reduction in profitability, the Board has decided to maintain the same level of cash payment for the final dividend for 2023 to allow shareholders to benefit from the lower number of shares in issue following the buyback of shares. The actual amount of the cash outflow on the 2023 final dividend is dependent on the number of shares in issue on the dividend record date. This is consistent with the approach adopted in respect of the interim dividend for 2023.
The total dividend for 2023 of 36.0p is 2.2 times (2022: 2.9 times) covered by adjusted earnings per share of 77.9p (2022: 96.6p) and is at the lower end of guidance for cover of between two and three times. This reflects Board confidence in the Group's prospects, very strong balance sheet, profitability and cashflow from operations for the year.
The Group's cash outflow on dividends paid during the year was £72.6 million (2022: £73.9 million). A liability for the final dividend has not been recognised at 31 December 2023 as there was no payment obligation at that date.
The final dividend will be paid on 9 May 2024 to shareholders on the Register of Members at the close of business on 12 April 2024, the record date. The ex-dividend date is 11 April 2024. The final dividend is subject to approval by shareholders at the Annual General Meeting to be held on 2 May 2024.
Other financial highlights include:
Full year adjusted operating profit of £205.5 million, above the top end of Analysts' forecasts
Strong free cashflow of £205.6 million (2022: £163.3 million)
£228.3 million (2022: £208.9 million) returned to shareholders in dividend payments and share buybacks during the year
Fourth share buyback programme increased from £50 million to £100 million in December 2023
Net cash at 31 December 2023 of £379.7 million (before IFRS 16 lease liabilities) remains very healthy (31 December 2022: £458.2 million) after returning £228.3 million to shareholders
