Caffyns

Caffyns Dividend Analysis and Summary

• Company: Caffyns plc
• Dividend type: Interim
• Amount: 5.0 pence per Ordinary share (unchanged vs prior year)
• Ex-dividend date: 11/12/2025
• Record date: 12/12/2025
• Payment date: 07/01/2026
• Recent dividend history: Interim 5.0p (H1 FY26), final 5.0p (FY25) ? implied prior full-year total 10.0p
• Estimated cash cost of this interim: ~£136k (c. 2.73m shares ex-treasury × 5p), consistent with the £136k prior cash dividend outflow

• Sustainability: Weaker. H1 FY26 shows an underlying loss before tax of £0.81m and underlying EPS of -22.2p; basic EPS -25.8p. Operating cash flow was slightly negative (-£0.07m). The interim is therefore not covered by earnings or H1 operating cash.
• Balance sheet and liquidity support: Net bank borrowings £9.6m (32% of equity) with £6.5m undrawn facilities and cash £2.4m; predominantly freehold estate with an unrecognised surplus of £11.2m (Mar-25), which provides asset backing and optionality if required.
• Financing conditions: HSBC has granted covenant waivers (interest cover and leverage for Sept and Dec quarters) and moved to a positive Senior EBITDA requirement at 31 Mar 2026 plus minimum cumulative EBITDA hurdles in FY27, with a £2.0m minimum headroom requirement. This indicates lender support but also tighter constraints, which can indirectly pressure dividends if trading remains weak.
• Growth trajectory: Flat. Interim held at 5.0p; prior full-year total was 10.0p. Given losses, elevated interest/stocking costs, and covenant framework, near-term dividend growth looks unlikely. Continuation at current level depends on H2 recovery and cash generation.
• Capital allocation: Company continues to pay dividends alongside modest capex (£0.7m) and pension deficit contributions (£0.6m in H1). With finance costs high (£1.44m) and trading under pressure, dividend payments currently rely more on balance sheet flexibility than on earnings.