Carillion sticks with the dividend growth policy - just...

Carillion released their preliminary results for 2012 this morning and following their last 7 years of consistent dividend growth they have indeed increased their dividend again for the coming year, maintaining their dividend policy of dividend growth. The dividend is to increase by a marginal 2%, which is likely why the share price has been a touch hit today. Their earnings per share are up 16% to 37.2p per share. Carillion have seen a reduction in turnover this year however they have suggested that this is down to a move away from low margin contracts. The margins have increased however so it appears that this strategy may well be working. As previously stated, they have decided to only increase their dividend by 2%, this is from 16.9p per share to 17.25p per share. The final dividend of 11.85p per share will go ex dividend on the 15th May to be paid on the 14th June. Thie marginal dividend increase is likely down to the fact that there are uncertain times ahead and therefore the need to keep cash on the balance sheet. No matter though at today's prices with the forecast dividend in the results Carillion is yielding 5.55%, a the dividend policy confirms dividend growth year on year of 2%, and has a dividend cover of 2.25. I will continue to hold these for the long term.