Share sur­prise de­spite poor re­sults

Finweek English Edition - - SIMON SAYS -

St ay i n g wi t h di v i d e nd s , wea k Tru­worths re­sults saw same store sales down 0.8%, with prod­uct inf la­tion at 6% – mean­ing a 6.8% de­crease. But a re­duc­tion in the div­i­dend cover from 1.6 times to 1.4 times means an im­proved div­i­dend pay­out, al­beit the ac­tual div­i­dend in­crease was only 9%. If the cover had not been de­creased the div­i­dend would have been down a few per­cent­age points. By de­creas­ing the cover man­age­ment is telling the mar­ket that the com­pany is pro­duc­ing more cash than it can read­ily use and that cash will be re­turned to share­hold­ers – as it should be. That all said, the re­sults did not look great and the sur­prise was the mar­ket push­ing the share higher.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.