Eurocell

Eurocell Dividend Analysis and Summary

• Proposed final dividend: 4.1p per share (FY24: 3.9p), up 5%.
• Total FY25 ordinary dividends: 6.4p per share (FY24: 6.1p), up 5% (cost: £6.4m).
• Interim dividend paid: 2.3p (Oct 2025), up 5%.
• Ex-dividend date: 16/04/2026; Record date: 17/04/2026; Payment date: 19/05/2026.
• Shareholder returns: £5m buyback completed (Feb 2026); total returns for 2025: £11.4m, equivalent to a c.8% “total returns” yield (company calculation).

• Earnings cover: FY25 adjusted EPS 14.6p implies dividend cover of ~2.3x; on reported EPS 9.5p, cover is ~1.5x. This supports a maintained to modestly growing ordinary dividend.
• Cash flow support: Net cash from operating activities £48.4m comfortably covers cash dividends (£6.2m paid in 2025) and the completed buyback (£6.0m cash outflow), even alongside capex of £12.5m.
• Balance sheet and liquidity: Pre-IFRS 16 net debt £22.1m (0.7x pre-IFRS 16 EBITDA) with a refinanced £75m RCF to 2030 and good covenant headroom. This underpins dividend capacity despite higher finance costs.
• Growth trajectory: Ordinary DPS rose 5% y/y, ahead of adjusted EPS growth (+1%), indicating willingness to sustain real DPS growth through the cycle while supplementing returns via buybacks.
• Capital allocation: Board reiterates a blend of ordinary dividends and “supplementary distributions” (currently buybacks). With ongoing investment (ERP non-underlying costs c.£13m over 2024–27; recycling consolidation capex ~£2.6m), DPS growth is likely to remain prudent but supported by cash generation and Alunet’s contribution.