Walker Greenbank hikes dividend after first half growth

Walker Greenbank hiked its interim dividend 25.7% after an encouraging first half of the year in which the interior decoration company increased sales thanks to investments in brands, new products and digital fabric printing innovation.

The AIM-listed company, whose customers range from Buckingham Palace to Japanese fashionistas, lifted sales 11.4% to £45.8m and drove profit before tax 25.8% higher to £2.89m.

There was a strong performance from the manufacturing division, where sales rose 8.2% to £18.6m, of which digital fabric printing sales surged 35.0% to £3.2m.

UK brands sales were up 7.6% and overseas brands 11.6% in reportable currency, 13.5% in constant currency, and have continued to grow in the second half apart from slowing slightly overseas.

Earnings per share, adjusted for accounting charges relating to share-based incentives and defined benefit charge, crawled 3.9% higher to 5.35p, but the interim dividend was lifted to 0.44p per share from 0.35p the same time last year due to the board's confidence in the current financial position and future financial performance.

Chairman Terry Stannard said brand sales in the first ten weeks of the second half were up 7.5% in reportable currency compared with the same period last year.

"This is an encouraging performance ahead of our key autumn selling period and reflects strong trading in the UK, where brand sales are up 7.5%, and in overseas markets, where Brand sales are up 8.5% in constant currency. Manufacturing also continues to perform strongly.

"The board remains confident of meeting expectations for the full year."

Analysts at Investec said that although comparatives toughen as the company enters its key autumn selling period, it agreed trading to date was encouraging - but made no change to PBT forecasts at this stage, despite a 2% increase to its sales estimate to £90.3m.

"Higher levels of business investment and interest costs hold our numbers back, but we see upside risk to forecasts."