FTSE350 companies results and dividend announcements in May

May 31, 2013

During May a number of companies have released their results and dividends, including:

National Grid

National Grid issued final results for the year to 31 March. The final dividend is 26.36 pence going ex-dividend on 5 June and payable on 21 August. This makes a total of 40.85p for the year, a predictable 4 percent up on last year’s 39.28 pence. From now on, the new dividend policy for the next few years is to grow the payout at least in line with RPI inflation. The 2013/14 dividend is forecasted at 41.9 pence. I have extensively commented on the new dividend policy: Click Here.

SSE

SSE is paying a final dividend of 59 pence going ex-dividend on 31 July with payment expected on 27 September. Up an inflation beating 5.1 percent on last year’s 80.1 pence, making a total for the year of 84.2 pence. This is the 14th successive year of above inflation rises.

With the current year dividend forecast at 88.4 pence, SSE is planning to continue above inflation dividend increases whilst maintaining cover in the medium term at around 1.5.

Worryingly, though, net debt at £7,348m has worsened from £6,756m last year, driving gearing up to an increasingly uncomfortable 218 percent from 197 percent.

United Utilities

United Utilities is paying a final dividend of 22.88 pence going ex-dividend on 19 June with payment expected on 2 August. This makes a total for the year of 34.32 pence, up an inflation beating 7.2 percent on last year’s 32.01 pence.

United Utilities dividend policy for the current five year regulatory period to 2015 to deliver annual increases of RPI+2%. The current year dividend forecast is 35.9 pence.

Compass Group

Compass produced its six month results to 31 March. The interim dividend at 8 pence is 11 percent ahead of last year’s 7.2p. The share is going ex-dividend on 26 June and the dividend is payable on 29 July. The current year dividend forecast is 23.6 pence

Vodafone Group

Vodafone Group announced its annual results to 31 March. The final dividend is 6.92 pence going ex-dividend on 12 June with payment on 7 August. The total for the year is 10.19 pence, up an inflation beating 7 percent on last year’s 9.52 pence.

Vodafone announced a new dividend policy. For the near future they say that they aim to maintain the dividend at least at current levels. Of course, this could be interpreted that there may be no dividend increase for 2014.

Royal Dutch Shell

Royal Dutch Shell – the quarterly dividend payer – published its first quarter results. Announcing a 4.7 percent jump, the Q1 dividend will be US 45¢ – compared to 43¢ paid for Q1 2012. The 2013 forecast dividend in sterling is approx 118 pence.

So-called adjusted replacement cost earnings were up at $7.5bn for the quarter whilst operating activities cash flow was down 14 percent at $11.6bn. Gearing was lower at 31 March at 10.1 percent, down from 11.9 percent a year earlier.

BP

BP’s Q1 dividend is US9.0¢ payable on 21 June. This compares favourably with its Q1 dividend payment of US8.0¢ paid last year. The 2013 dividend forecast in sterling is 24.4 pence.

Replacement cost profits were down slightly over Q1 2012. BP’s debt has come down substantially, since 31 December when it was $27.5bn with gearing of 23.2 percent, to $17.6bn at 31 March with gearing of only 13.6% due to the cash coming in from the sale of their stake in Russian TNK-BP.

The big uncertainty remains the final bill from the Gulf of Mexico spill. So far the total charge has been US$42.2bn but it is not over yet due to ongoing legal action.

AstraZeneca

AstraZeneca issued first quarter results. Revenue and results were down compared with last year’s first quarter, due essentially to the loss of exclusivity on several brands. AZN expect that this decline will follow through to the full year results for 2013.

A restructuring programme has been launched which will initially require substantial costs but is projected to deliver profitable benefits over the next few years. Net debt increased in the quarter to $1.8bn but despite that by 31 March gearing was still a very low 7.9 percent, up from an even lower 5.8 percent at 31 December. The 2013 dividend forecast in sterling is 186 pence.

GlaxoSmithKline

GSK released first quarter results. The Q1 dividend is 18 pence payable on 11 July, with the shares having gone ex-dividend earlier in May. An 5.9 percent increase compared to the Q1 2012 figure of 17 pence. The 2013 dividend forecast is 77.5 pence.

While net operating cash inflow was up, net debt mushroomed to a massive £15.4bn, from £8.9bn a year ago, driving gearing up from an already high 101 percent to a “utilities look-a-like” 230 percent. Why? To part-pay for a rather unnecessary share buyback this year.

British American Tobacco

Against a backdrop of fragile economic conditions persisting in many parts of the world British American Tobacco’s first quarter statement was remarkable upbeat. Though volumes are down, revenue has grown implying successful policy of implementing price increases. Even better, market share grew in the company’s top 40 markets.

The anticipated dividend for 2013 is 151 pence. No wonder the shares keep motoring up.

Imperial Tobacco Group

Imperial Tobacco Group half year report to 31 March showed revenue and results down while debt was up a lot, to £11.0bn, from £8.8bn at the year end of 30 September 2012. Gearing is now about 178 percent against 145 percent last year.

Irrespective, the company is confidently upping its interim dividend – 11.0 percent ahead of last year’s interim payment of 31.7pence – to 35.2 pence going ex-dividend on 17 July and payable on 16 August. The dividend forecast for 2013 is 116.6 pence

The company also announced that it intend to grow its dividends by at least 10 percent per year over the medium term, which is well ahead of foreseeable inflation. We’ll see.

Unilever

Unilever accounts in Euros and the Q1 dividend in Euros is 26.9¢. For Q1 2012 it was 24.3¢, an increase of 10.7 percent. Following sterling conversion Q1 2013 dividend is 22.91 pence payable on 12 June, an inflation beating 15.6 percent up to the 19.81 pence for 2012. The forecast dividend for 2013 is 89.0 pence.

While developed markets remain sluggish, the company is expecting another year of profitable volume growth due to high growth in emerging markets with sustainable core operating margin improvements and strong cash flow.

British Land

British Land released annual results to 31 March. The final quarter dividend is 6.6 pence going ex-dividend on 3 July and payable on 09 August. This makes an annual total of 26.4p, a below inflation increase of 1.1 percent over last year’s 26.1 pence. Directors expect next year dividends to be not less than 2013 i.e. (at least) the same.

BT Group

BT Group published annual figures to 31 March. The final dividend is 6.5 pence going ex-dividend on 7 August and will be payable on 2 September. This makes an annual total of 9.5 pence, an inflation beating 14.5 percent above last year’s dividend of 8.3 pence.

With cash flow increasing, BT was able to lower net debt to £7.8bn from £9.1bn during the year. However, their pension fund deficit again increased, this time by £3bn to £5.9bn. Debt and gearing remain excessive. Nevertheless, the company expects that improving efficiency across the business will allow them to continue delivering strong financial results with the directors confidently forecasting dividend increases of 10-15 percent for each of the next two years.

Sage Group

Sage Group issued its six month figures to 31 March. The interim dividend will be 3.69 pence, an inflation beating increase of 6 percent on last year’s 3.48 pence, having gone already ex-dividend on 15 May, the dividend is payable on 7 June.

The company also announced the payment of a special dividend of 17 pence, going ex-dividend on 10 June and payable on 28 June, together with a share consolidation. This means investors will end up with fewer shares following the payment of the special dividend.

Some time ago, for no apparent business reason, Sage announced
its intention to leverage-up, i.e. to finance share buy-backs and now the special dividends. From a healthy net cash position a year ago, they now have debt of £231m making gearing of 21.2 percent.

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