Anglo Pacific Group PLC (LON:APF) (TSX:APY) has said its directors are recommending a 25% increase in its final quarterly dividend for 2018 to 3.125p, to be approved at its Annual General Meeting on 13 May 2019.
The dual London and Toronto-listed royalty company said this would result in a total dividend for the year of 8p per share, around a 14% increase on the 7p per share paid in 2017.
It also said a quarterly base dividend level of 1.625p is to be retained for 2019, with the final dividend to be decided when announcing the fourth quarter 2019 dividend.
Julian Treger, Anglo Pacific’s chief executive officer, commented: "In arriving at this number, we took into account a very strong set of results for 2018 along with the prospect of meaningful growth from Kestrel in 2019, as announced in our recent Q4 2018 trading update.”
He added: “We are mindful of balancing our growth ambitions with rewarding our shareholders for their continued support and feel that this level of dividend provides healthy dividend cover in excess of 2 times while allowing us to recycle income into growth opportunities. Growth remains the firm focus for 2019."
In a note to clients, analysts at Peel Hunt pointed out that the 8p total pay-out for 2018 was above their estimate for a total of 7.5p.
They added: “We believe our current 2019 DPS estimate of 8p now looks conservative, particularly given management's confidence that its main Kestrel royalty looks set to deliver record volumes during this year.”
Peel Hunt reiterated a ‘buy’ rating and 205p share price target on Anglo Pacific shares, which in early afternoon on Wednesday were trading at 168p, up 3.1% on Tuesday’s close.