Dr. Martens

Dr. Martens Dividend Analysis and Summary

• Proposed final dividend: 1.70p per share (subject to shareholder approval).
• Total FY26 dividend: 2.55p (interim 0.85p + final 1.70p), flat year-on-year.
• Ex-dividend date: 27/08/2026 (derived from record date).
• Record date: 28/08/2026.
• Payment date: 07/10/2026.
• Payout/cover:
  • 103% of reported earnings (EPS 2.5p) — sub-1x cover.
  • ~61% of adjusted earnings (adjusted EPS 4.2p) — ~1.6x cover.
• Stated dividend policy: progressive, targeting 25–35% earnings payout.

• Maintained, not grown: DPS held at 2.55p despite thin statutory cover. On an adjusted basis coverage is healthier (~1.6x) but still above the 25–35% policy range, implying limited scope for near-term DPS growth until earnings rise.
• Earnings momentum improving: FY26 adjusted PBT up 61%, gross margin +120bps to 66.2%, and tighter cost control support medium-term cover improvement if FY27’s “further strong PBT growth” materialises.
• Cash support acceptable: Operating cash flow £141.1m; after interest, leases and tax the dividend (~£24.5m) was covered roughly ~2x in FY26. Net bank debt down to £69.7m (total net debt incl. leases £213.5m), leverage 1.4x within the <1.5x target.
• Headwinds to watch: FY27 guidance points to higher capex (~£30m) and brand/retail investment, and notes the retail strategy execution will be a short-term revenue headwind. These could constrain free cash flow and the ability to lift DPS near term.