Touchstar

Touchstar Dividend Analysis and Summary

• Final dividend: 1.5p per share (unchanged YoY)
• Interim dividend: 1.75p per share (paid Nov 2025; up from 1.5p)
• Total FY25 ordinary dividend: 3.25p per share (up 8.3% YoY)
• Ex-dividend date: 23/07/2026
• Record date: 24/07/2026
• Payment date: 12/08/2026 (subject to AGM approval)
• Share count/cash cost: c. 7,921,494 voting shares after buybacks; implied cash cost of the final dividend ˜ £119k; full-year DPS cash cost ˜ £257k (treasury shares do not receive dividends)
• Dividend cover (FY25): Adjusted EPS 3.83p covers total DPS 3.25p by ~1.2x; statutory EPS was a loss due to exceptional non-cash items

• Coverage and cash: Despite a statutory post-tax loss (driven by a non-cash software impairment), adjusted post-tax profit of £312k and operating cash flow of £792k support the FY25 total DPS of 3.25p (~£257k cash cost). Year-end net cash £2.34m provides a buffer.
• Quality of revenues: Recurring revenue rose to £3.21m (47% of turnover), improving visibility and underpinning dividends through the cycle.
• Payout stance: Total DPS up 8.3% YoY despite adjusted EPS falling 25.8% (to 3.83p). That implies a higher payout ratio (~85% of adjusted EPS), leaving limited headroom if trading underperforms during the 2026 transition.
• Outlook interaction: Management guides for a return to revenue growth and profitability in 2027, suggesting 2026 may remain subdued. Near-term dividend sustainability rests on cash generation and recurring revenue rather than earnings growth.
• Capital allocation: The Group returned £479k in FY25 (dividends + buybacks). Buybacks (278,583 shares at 77.5p) modestly reduce future dividend cash outflows, but also consume liquidity that could otherwise bolster cover.