Qantas (QAN) is returning to paying dividends to shareholders and announced another buyback after revealing a record profit for the year to June 30.
And from comments it seems the airline wants to resume paying dividends on a regular basis, not a one off like the 2015-16 final.
The airline said this morning that it earned an underlying profit before tax of $1.53 billion for the 12 months ended 30 June 2016 – the best result in its 95-year history.
The statutory profit before tax was $1.42 billion, also a record and an 80% increase on the year before.
Revenue rose 2.4% to $16.2 billion.
The statutory after tax profit jumped 84% to $1.029 billion, compared with $560 million in 2014-15.
"The record performance is a 57 per cent per cent improvement on financial year 2015. It means Qantas can resume dividend payments, reward 25,000 EBA-covered employees with a one-off cash bonus, and continue investment for customers, including extending wi-fi to Qantas’ regional and international fleets and finalising the network and customer experience for the Qantas Dreamliner,” directors said in this morning’s statement to the ASX.
The company said it was looking to return another $500 million to shareholders via a final dividend of 7 cents a share and a buyback of $366 million. The dividend will cost $134 million.
Qantas said it has returned more than $1 billion to shareholders over the past 12 months, through a $505 million capital return (completed in November 2015) and $500 million on-market share buy-back (completed in June 2016).
"The Qantas Board has declared a fully-franked final ordinary dividend of 7 cents per share – or $134 million in total – to be paid on 12 October 2016. In addition, Qantas will carry out a further on-market share buy-back of up to $366 million, subject to shareholder approval,” the airline said.
“Where there is surplus capital in future the Group will first distribute to shareholders via an ordinary dividend, in conjunction with share buy backs, special dividends or a capital return should additional surplus exist.
“Future dividends will be partially franked or unfranked, until Qantas’ franking credit balance – which will fall to $26 million after the current dividend is paid – increases,” Qantas said.
Chief executive Alan Joyce said the result demonstrated the success of Qantas’ strategy to build a strong, sustainable future for the national carrier.
“Our transformation program is paying dividends for our shareholders, our customers and our employees,” Mr Joyce said. “Our people can be incredibly proud of what they’ve achieved. It’s thanks to their skill and commitment that we’re announcing a record profit today.
“This was a true team performance, which shows that our strategy is the right one for the tough markets we’re operating in and the long-term opportunities we see ahead of us.
“Transformation has made us a more agile business, created value for our shareholders and given us a platform to invest for the future. Qantas is stronger than ever, but we’re also determined to keep changing and adapting so that we can succeed no matter what environment we’re in.”
