There’s nothing like a special dividend to bolster shareholder support, particularly if the company has lost around a fifth of its market value over the previous 12 months. Clothing chain Superdry (SDRY) has announced a special 25p return alongside an 11 per cent hike in its regular full-year payout, a move that obviously played well with investors, judging by the double-digit share price rise on results day.
The group finished up with net cash of close to £76m, but expects that to pare back, as dividends will drive a combined cash outflow of £38.4m through FY2019. That said, the company generated operating cash flow of £135m – before working capital movements – over the last financial year.
In the meantime, Superdry plans to focus on what it calls “capital-light” channels – that means wholesale and online – and limit physical space growth this year to between 4 and 5 per cent (previously 8 per cent). The growing wholesale division has weighed on gross margins lately, but management hopes a multi-channel strategy – combined with other operational efficiencies – will strengthen operating margins by 20 to 50 basis points.
Analysts at Liberum still expect pre-tax profit of £107m for the year ending April 2019, giving EPS of 103p, up from £97m and 93.1p in FY2018.
| SUPERDRY (SDRY) | ||||
| ORD PRICE: | 1,274p | MARKET VALUE: | £1.04bn | |
| TOUCH: | 1,273-1,275p | 12-MONTH HIGH: | 2,102p | LOW: 1,086p |
| DIVIDEND YIELD: | 2.4%* | PE RATIO: | 20 | |
| NET ASSET VALUE: | 501p | NET CASH: | £75.8m | |
| Year to 28 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 431 | 45.2 | 34.0 | nil |
| 2015 | 487 | 59.5 | 56.1 | nil |
| 2016 | 598 | 55.4 | 50.7 | 23.2 |
| 2017 | 752 | 84.8 | 81.2 | 28.0 |
| 2018 | 872 | 65.3 | 62.2 | 31.2 |
| % change | +16 | -23 | -23 | +11 |
| Ex-div: | 12 Jul | |||
| Payment: | 21 Sep | |||
| *Excludes 25p special dividend (ex-div: 11 Oct 18, payment: 14 Dec 2018) | ||||
