Close Brothers announces reduced dividend amid challenging economic climate

Close Brothers announces reduced dividend amid challenging economic climate

Close Brothers plc has announced a final dividend of 40.0p per share for the year ended 31 July 2020, amounting to an estimated £59.8m to be paid out to shareholders in November 2020. Despite the company’s progressive dividend policy, this is down from the final dividend payment made a year ago of 44p per share. This proposed cut will be put to a vote at this year’s AGM. This, combined with the FTSE 250 company’s announcement in April that it was cancelling the interim dividend, brings the total annual dividend down by 39% from 66 pence per share paid out for the financial year ending July 2019.

In its half year report released on 10 March 2020, Close Brothers commented on the strength of its financials, stating that it had ‘delivered a return on opening equity of 13.6% (2019: 16.1%) and are pleased to declare an interim dividend of 22.7p (2019: 22.0p), up 3%.’ However, on 2 April 2020, in response to the pandemic, the company announced that it had cut its interim dividend ‘recognising the significant challenges currently faced by businesses and individuals, and consistent with our purpose of helping the people and businesses of Britain.’

This year, despite the company recording a pretax profit of £140.9m, (down 47% from £264.7m a year ago), Close Brothers announced their intention to pay a final dividend, albeit at a lower rate. In the company’s preliminary end of year results, published on 22 September 2020, t

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