Heath Samuel & Sons

Website: Heath Samuel & Sons
Index: AIM
EPIC: HSM
Supersector: Construction and Materials
Sector: Construction and Materials
Subsector: Building Materials and Fixtures
Market Cap: £9M
Payout Frequency: Semi-Annual

Heath Samuel & Sons Dividend Analysis and Summary

Key dividend details

Declared dividend: 4.5p per share (interim, FY2026) — unchanged vs prior year.
Ex-dividend date: 12/02/2026
Record date: 13/02/2026
Payment date: 20/03/2026
Indicative cash cost: c. £114k (based on 2,534,322 shares).
Recent dividend context: FY2025 final of 8.5625p (paid in the period; cash outflow £217k). Last full-year payout (FY2025) totalled 13.0625p (interim 4.5p + final 8.5625p).

Coverage and financial support

H1 FY2026 EPS: 21.4p; covers the 4.5p interim c. 4.8x.
FY2025 EPS: 35.0p; covered last year’s total dividend (13.0625p) by c. 2.7x.
Cash and cash equivalents: £2.62m at 30 Sept 2025 (up £454k since March).
Operating cash flow (H1): £932k, comfortably covering dividend obligations (H1 dividends paid: £217k for FY2025 final).
Balance sheet: Net assets £12.5m; no bank debt disclosed (only lease liabilities). Capex modest (£34k), with £175k capitalised product development.

Management commentary relevant to dividends

Trading outlook: Order intake has been below budget since June 2025; Board expects a weaker H2 and impact on full-year profit.
Cost actions: Headcount and costs reduced in anticipation of tougher conditions.
Pension scheme: IAS 19 surplus £701k (net £526k); cash contributions agreed at nil for FY2026. Directors do not expect the surplus to be distributable; a future buyout would likely require a premium (not currently affordable).
Pricing/tariffs: US tariffs passed through to customers; broader project cost inflation causing some client pauses.

Dividend sustainability and growth outlook

Sustainability: Near-term cover appears solid given H1 EPS and cash generation, and the small absolute cash cost of the interim dividend. Net cash position and low capex support ongoing payments.
Growth trajectory: The interim is flat year-on-year, and the FY2025 final was also unchanged. This points to a pause in dividend growth while conditions remain uncertain.
Support from capital allocation: Management is conserving cash (modest capex, cost reductions) and maintaining the interim, which signals a cautious but supportive stance toward the dividend.
Watchpoints for FY2026 final: Given explicitly weaker H2 expectations, dividend growth is unlikely near term; maintaining the payout looks more probable than increases absent a demand rebound.

Structural changes or policy signals

No M&A, demerger, or share consolidation disclosed.
Operational restructuring via headcount reduction to protect margins and cash flow.
Pension buyout is a potential strategic action in future but not imminent; could require cash if pursued.

Risks and flags to dividend stability

Demand risk: Below-budget orders since June, project pauses in key markets (UK/US), and macro uncertainty could pressure H2 profits and cash flow.
Margin pressures: Tariffs and broader cost inflation (though tariffs are being passed on); wage and NIC increases affect a labour-intensive model.
Pension risk: While contributions are nil for FY2026, a future buyout could entail a material cash premium.
Small-cap sensitivity: Modest absolute profit base increases sensitivity to trading volatility when setting the final dividend.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
20/02/2025	21/03/2025	Interim	4.50p	GBX
21/08/2025	26/09/2025	Final	8.5625p	GBX

Total (Annual Dividends Per Share): 13.06p

Dividend Yield = Annual Dividends Per Share (13.06p) ÷ Share Price (377p) = 3.46%

Ex Dividend Date	Payment Date	Type	Amount	Currency
12/02/2026	20/03/2026	Interim	4.5000p	GBX
21/08/2025	26/09/2025	Final	8.5625p	GBX
20/02/2025	21/03/2025	Interim	4.50p	GBX
15/08/2024	20/09/2024	Final	8.56p	GBX
22/02/2024	22/03/2024	Interim	4.50p	GBX
03/08/2023	21/09/2023	Final	7.56p	GBX
23/02/2023	24/03/2023	Interim	5.50p	GBX
28/07/2022	02/09/2022	Final	7.56p	GBX
24/02/2022	25/03/2022	Interim	5.50p	GBX
15/07/2021	13/08/2021	Final	6.88p	GBX
20/02/2020	20/03/2020	Interim	5.50p	GBX

Year	Interim	Final	Currency	Total	Change
2024	4.500	8.560	GBX	13.060	0.000
2023	5.500	7.560	GBX	13.060	0.000
2022	5.500	7.560	GBX	13.060	89.820
2021		6.880	GBX	6.880	25.090
2020	5.500		GBX	5.500

Number of Shares:

Payment	Paid	Amount
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