The Grafton Group Board has declared an interim dividend of 10.50 pence per share, an increase of 5.0 per cent on last year's interim dividend of 10.00 pence.
Notwithstanding the reduction in our first half profitability, the Board has decided to maintain a similar level of cash payment for the 2024 interim dividend as it paid out for the 2023 interim dividend, allowing shareholders to benefit from the lower number of shares in issue following the buyback of shares executed during the second half of 2023 and the first half of 2024. The cash outflow on this year's interim dividend is expected to be circa £21.0 million although the actual amount of the cash outflow on the 2024 interim dividend is dependent on the number of shares in issue on the dividend record date.
Whilst the Board's medium-term dividend cover policy is between two-times and three-times adjusted earnings, it is likely that in the current financial year the full year dividend cover ratio will drop modestly below the lower level of the target. Given the Group's strong balance sheet and cash flow and recognising the Board's confidence in the medium and long-term growth prospects for the Group, it was appropriate to target a lower dividend cover ratio in the current year.
The interim dividend for 2024 will be paid on 11 October 2024 by Grafton Group plc to shareholders on the Register of Members at the close of business on 13 September 2024 (the 'Record Date'). The ex-dividend date is 12 September 2024.
Other financial highlights include:
First half adjusted operating profit of £83.1million (H1 2023: £105.1million) reflective of weaker market conditions outside the Group's home market in Ireland.
Strong cashflow generated from operations of £161.1 million (H1 2023: £191.3 million).
£104.8 million (H1 2023: £132.7 million) returned to shareholders in dividend payments and share buybacks in the first half.
On the strength of anticipated free cashflow generation in the current financial year and confidence in the Group's prospects a new share buyback programme for up to £30m will commence today, complementing dividend growth of 5.0%.
Strong balance sheet preserved for organic and inorganic development opportunities.
Adjusted return on capital employed of 11.1%.
Continue to anticipate delivering full year adjusted operating profit in line with analysts' expectations recognising important Autumn trading season to come.
