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OPG spells out dividend policy as annual profits rise strongly

Last updated: 08:33 01 Aug 2016 BST, First published: 07:18 01 Aug 2016 BST

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OPG saw a significant ramp-up on output during the year just gone.

India-focused generator OPG Power Ventures PLC (LON:OPG) spelled out its dividend policy as it posted a strong rise in profitability.

Having already said it would make a payout in calendar 2016, it said the plan is to distribute around 15% of net earnings with the intention the grow that figure over time.

Analysts at broker Cantor Fiztgerald suggest OPG could pay out up 33% of earnings longer term.

The prelims revealed the firm's total operating capacity is now 750 megawatts (MW), with 480 MW brought online in the year to March 31.

Although not fully reflected in the figures, the increase in output did boost pre-tax profit by just under a third to £28.6mln for the year just gone.

The company said revenues for the first quarter of the current financial year are £57mln, representing a significant uptick in turnover.

Operating margins grew by 6.1 percentage points to 39.5%.

Separately, CEO Arvind Gupta has accepted the role of executive chairman following the retirement of current chair MC Gupta.

"The OPG management team have much to be proud of upon the completion of their 750 MW programme,” said MC Gupta.

“The company's results and continued growth in revenues are a testament to this. 

“This positions the company uniquely well, in my view, to take advantage of the many good growth opportunities the Indian power sector will have to offer in the years to come.”

The shares rose 4% to 58.55p in the wake of the results, though Cantor Fitzgerald reckons the stock is worth 130p.

Analyst Adam Forsyth said the business is "progressing well" and that the first-quarter reenue figure was "encouraging".

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