Department store operator Myer will pay shareholders a dividend for the first time in five years despite the company’s profits falling by a quarter through the first half of the financial year.
At its half-yearly results released on Thursday, the retailer announced it would pay a 1.5 cents per share interim dividend, payable to investors on May 12.
It will be the first time the company has paid a dividend since 2017 and be welcomed by largest shareholder, Solomon Lew and his Premier Investments group who last month paid around $15 million to boost their stake to just under 20%.
Myer CEO John King said on Thursday the company’s choice to bring back its dividend was a sign of “confidence in the momentum being built” by Myer, which has struggled throughout the pandemic thanks to lockdowns and plunging earnings.
The news saw the shares leap more than 24% to 51 cents. Myer shares were last at this level in November.
Myer had upgraded its estimates for the January 31 half year on January 25 and left hints that a dividend might be in sight.
Yesterday the retailer said sales grew 8.5% to $1.5 billion as the company’s online performance continued to surge, jumping 47.5% year on year to $424 million.
Since the start of the second half of the financial year, Myer says it the surge has continued with sales up 15.3% across the business thanks to strong growth in both the physical and online channels.
For the six months to the end of January, Myer’s underlying profits fell 25% to $32.3 million, thanks to the absence of the JobKeeper subsidy, of which Myer claimed $51 million in the first half of the 2021 financial year. Excluding the net benefit of this subsidy, profits rose 55.2% to $32.2 million.
“The half-year results we have announced today demonstrate the strength and resilience of the business providing continued momentum for future growth,” Mr King said in Thursday’s statement.
“The combination of our online platform and store network performed well in navigating the challenges faced during the period including disruptions caused by government-mandated lockdowns to mid-October, the emergence of Omicron in late December, and the mitigation of major supply chain disruption and staffing availability in early 2022.”
