Three major Irish companies to announce rise in dividends

Three of Ireland’s largest seven publicly-traded companies are poised to announce dividends increases next week as they brush off the impact of Brexit and an uncertain outlook for the global economy.

Kingspan, the insulation manufacturer, is likely to hike its interim payment to shareholders to 10 cent from 8 cent for the first half of last year as it reports results on Monday, according to Bloomberg data, which compiles consensus expectations among analysts.

Bookmaker Paddy Power Betfair, slated to publish results on Wednesday, is predicted to increase its dividend for the six months by 8 per cent to 65 cent. Building materials giant CRH is tipped to increase its interim shareholder payout by a similar rate to 20 cent.

Analysts largely see corporate dividends across Ireland holding up following the UK referendum to quit the EU, as companies, largely sitting on stronger balance sheets than during the financial crisis, take a long-term view of their prospects. In a world where cash deposits and bond investments are yielding record-low rates globally, investors are relying more heavily on dividends for income.

Earnings growth

Merrion Capital analyst Darren McKinley said yesterday that Kingspan was expected to deliver 12 per cent earnings per share growth for the full year, to €1.20.

With the UK accounting for 29 per cent of the company’s revenues and Europe a further 68 per cent, comments from management next week on both markets will be key to how the stock performs in the near term.

CRH said last month that its earnings before interest, tax, depreciation and amortisation would come to about €1.1 billion for the first half, some 10 per cent ahead of its previous guidance.

Paddy Power Betfair's first set of interim results as a merged entity will be closely watched for "more specifics around future strategy, an update on achievable synergies and comfort that business momentum has not been unduly impacted by integration work", said David Jennings, an analyst with Davy.