First-half results from Countrywide (CWD) were so encouraging that management has revised its dividend policy and intends to pay out even more cash to shareholders. The property services group, which owns a string of lettings and estate agents across the country, plans to pay out 35 to 45 per cent of post-tax profit as dividends - up from 25 to 35 per cent.
That pledge follows an exceptionally strong first half, with underlying pre-tax profit tripling to £37.1m on the back of a booming property market. Income from the estate agency jumped 17 per cent to £101m, as the number of home sales it brought to exchange swelled by a fifth. The lettings division was another strong performer. Properties under management grew 29 per cent and income grew 20 per cent to £64m, boosting divisional cash profits by 44 per cent. The 23 businesses acquired in the period contributed £5.1m to group revenue and £1.7m to profit.
With £43.5m of cash on the books at the period-end, management has announced a special dividend of 9p per share. The board now expects that, from 2015, the combined value of the ordinary dividend and any extra cash returned will equate to 60 to 70 per cent of post-tax profit (ex-amortisation).
Numis Securities expects pre-tax profit of £116m for the full year, giving EPS of 42p.
| COUNTRYWIDE (CWD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 506p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 505-506p | 12-MONTH HIGH: | 701p | LOW: 461p |
| DIVIDEND YIELD: | 2.2%** | PE RATIO: | 16 | |
| NET ASSET VALUE: | 248p* | NET DEBT: | 14% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 252 | -1.4 | 0 | 2 |
| 2014 | 326 | 39.0 | 15 | 5 |
| % change | +29 | - | - | +150 |
Ex-div: 13 Aug Payment: 15 Sep **Excluding a special dividend of 9p a share to be paid on the same day as interim dividend *Includes intangible assets of £647m, or 295p a share | ||||
