Shares in discount furniture retailer Fantastic Holdings (FAN) jumped to their highest level in more than a year yesterday after it surprised the market with a 43% surge in interim profit and fat rewards for patient shareholders.
Fantastic said it would give shareholders a 4 cents-a-share special dividend and doubled its interim payout to 6c a share after net profit rebounded to $6.9 million in the December half.
So it was no wonder the shares rose 6.8% to $2.20, the highest they have been since late 2013.
That was in a market down around 0.7% yesterday as investors took profits after the recent run of solid profits and buybacks.
FAN 1Y – Special dividend for Fantastic shareholders
Fantastic’s profit rebound came on an 8.7% rise in sales to $244.3 million, with like-for-like sales also up 8.7%.
Earnings before interest and tax rose 41.8% to $10.2 million.
New managing director Stephen Heath said in a statement all the company’s businesses delivered positive like-for-like sales growth and were profitable during the half, while the introduction of new products at Fantastic Furniture and Plush helped to drive sales.
Fantastic doubled its interim dividend to 6c a share and unveiled a special dividend of 4c a share, both payable April 8.
The company had a cash balance of $25.2 million at the end of December, offsetting debt of $15 million.
The balance sheet was further enhanced by the sale of a Dandenong property for $22.7 million earlier this month and the sale of the Dare Gallery business last month.
Investors appear to have anticipated the improved result and dividend windfall, with Fantastic shares rising 11% in the last three weeks.
