MARKET REPORT: Investors handed a boost as dividends come back with three firms set to hand out over £243m in payouts
After a dividend drought in 2020 retail shareholders were celebrating last night as three companies pledged to hand over £243million in payouts.
Home furnishings group Dunelm resumed its payments after sales rocketed despite stores shutting in lockdown.
Online sales more than doubled in the six months to the end of December as Britons stocked up on onesies, cosy thermal-lined curtains and arts and crafts supplies for a stay-at-home winter.
Divi delight: Home furnishings group Dunelm, packaging giant Smurfit Kappa and FTSE 250 housebuilder Redrow have pledged to hand over a combined £243m in payouts
Revenues were up by 23 per cent to £719million while profits were up by more than a third to £112million, even though it was forced to shutter stores because it is classed as non-essential retail.
The booming turnover meant it had enough cash in its arsenal to resume handing out dividends.
Shares rose 6.2 per cent, or 78p, to 1339p last night after it revealed the plans for a £24million half-year payout worth 12p a share.
Packaging giant Smurfit Kappa, which was the first FTSE 100 firm to restore dividends last year, also delivered a nice surprise to its backers.
Stock Watch – Deepverge
A company that makes human-like skin for drug and cosmetics groups to test their products on has opened two virus containment labs.
Deepverge’s units, at its York headquarters, come after its technology was used to investigate how the coronavirus behaves on human skin.
This allowed researchers working with several universities and companies to see what sort of hand sanitisers, chemicals and anti-viral products could kill the virus. Shares rose 4.1 per cent, or 1.25p, to 32p.
It has hiked the amount it will give back in a final dividend by 8 per cent to around 77p a share – or some £198million.
The company, whose shares rose 1.6 per cent, or 58p, to 3598p, has thrived during the pandemic as online shopping has driven demand for its boxes.
It has also managed to repay all the money it received from Government schemes related to the pandemic.
While Dunelm and Smurfit made gains, FTSE 250 housebuilder Redrow was in the red, falling 3.8 per cent, or 21.5p, to 550p, despite reintroducing its dividends with a £21million half-year payout worth 6p a share.
Redrow notched up record first-half sales of £1billion as thousands of people took advantage of the stamp duty holiday and reconsidered what they wanted from a home after being cooped up for months during the pandemic.
It sold 3,065 houses in the six months to December and said demand is still looking good beyond the tax holiday at the end of March.
But the sector had a bruising day as attention turned once again to the issue of dangerous cladding. Footsie-listed construction behemoth Persimmon – down 2.8 per cent, or 79p, to 2704p – surprised traders by announcing it has put aside another £75million to fund cladding replacements.
Around 26 of its properties could be affected by the need to remove unsafe materials from high-rise buildings.
Thousands of flat owners are facing huge bills for improvements and have found it hard to sell their homes on the back of new safety rules that came in after 2017’s Grenfell Tower fire, which killed 72 people.
The announcement came as housing minister Robert Jenrick unveiled £3.5billion to fix the cladding crisis yesterday.
Fellow builders Barratt Developments (down 2.5 per cent, or 17.6p, to 680p) and Taylor Wimpey (down 4.2 per cent, or 6.95p, to 158.95p) were among the other housebuilders that slid into the red, weighing on the wider market.
The FTSE 100 fell 0.1 per cent, or 7.20 points, to 6524.36, despite a surge in mining stocks that would normally keep it in the black, while the FTSE 250 lost 0.6 per cent, or 116.50 points, to close at 20,996.44.
Airport and rail station cafe-owner SSP tumbled 5.1 per cent, or 17p, to 317p following reports it will go cap in hand to shareholders to raise up to another £500million.
The Upper Crust and Caffe Ritazza operator has been thrown back into turmoil during the third lockdown, which has hit travel.
It managed to bank £216million from an emergency share sale last March and has tapped the Government for support.