Discoverie Group

Discoverie Group Dividend Analysis and Summary

• Interim dividend: 4.05p per share (+4% YoY)
• Ex-dividend date: 11/12/2025 (derived from record date)
• Record date: 12/12/2025
• Payment date: 23/01/2026
• DRIP: Available via Equiniti; election deadline 02/01/2026
• Cash cost of interim dividend: ~£3.9m
• H1 adjusted EPS: 19.5p; interim dividend covered ~4.8x (H1 basis). Reported diluted EPS 13.5p; coverage ~3.3x.
• Stated policy: Progressive dividend with long-term cover of >3x adjusted earnings.

• Coverage and cash support: Very strong. LTM free cash flow of £40.9m vs LTM dividends of £12.1m (~3.4x FCF cover). Interim dividend covered ~4.8x by H1 adjusted EPS, well above the >3x policy.
• Earnings trajectory: H1 adjusted EPS up 6% with adjusted operating margin up to 14.0%. Order book of £157m (~4.3 months) and improving Q2 momentum support near-term earnings.
• Cash conversion and balance sheet: Free cash conversion at 104% (LTM), capital expenditure low at 1.6% of sales, and gearing at 1.3x. RCF of £240m extended to May 2030 provides ample liquidity.
• Dividend growth: Interim DPS raised +4% (final dividend last year was +5%), indicating steady mid-single-digit progression aligned with earnings and cash generation.
• Capital allocation: Management continues to balance a progressive dividend with bolt-on M&A funded largely from internal cash flows; the Board explicitly targets maintaining dividend growth alongside acquisitions.