FTSE 100 firm Mondi share price (MNDI) rises as it hands out a special divi after a rise in annual profits
Mondi is delivering shareholders a special payout after profit climbed and the board signalled a positive outlook for 2018.
The figures
The packaging products company’s pre-tax profit rose five per cent in the year to December 2017 to €887m (£792m) on revenues of €7.1bn, up seven per cent from the previous year.
Mondi recommended a full-year dividend of 62 cents per share, up nine per cent from 2016, as well as a special dividend of €1 per share, highlighting the firm’s confidence in its outlook.
The FTSE 100 firm’s shares were up nearly 2.58 per cent at 1,887.5p in afternoon trading, among the top blue-chip risers.
Why it’s interesting
Mondi’s shares were hit in October when the firm warned its profits would miss expectations due to cost pressures and negative currency impacts, but chief executive Peter Oswald told City AM the announcement was taken out of proportion.
He said Mondi was ahead of its rivals in terms of the company’s capital approach. “We can organically grow, which not every one of our competitors can do.”
In 2017, the firm benefited from good demand and higher average selling prices in most of its businesses, and improvements to operational performance lessened the inflationary pressures due to the general economic recovery.
Mike van Dulken, the head of research at Accendo Markets, said the firm’s special dividend had perked investor interest.
“After October’s profits warning management would only offer this special dividend if it was confident in the outlook and views the current financial position as strong enough to wear the cash outflow and not jeopardize future commitments, including small-mid-sized acquisitions,” he said.
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What Mondi said
Oswald said:
We expect continued, but manageable pressure on the cost base across the group, a consequence of the turn in the commodity price cycle and the general economic recovery we are seeing in many of the regions in which we operate.
Our outlook for the business is positive and we remain confident that our consistent and focused strategy, robust business model centred around our cost advantaged assets, and firm focus on driving performance will sustain our track record of delivering value accretive growth.
Read more: Shares in this FTSE 100 company are falling after a warning on profits