Distributor Avnet is to pay its first ever dividend. An initial quarterly cash dividend of $0.15 per commr.on share will be paid on September 20, 2013 to shareholders of record as of the close of business on September 10, 2013.
The acquisitive firm reported slightly improved sales last week; the quarter ended June 29, 2013 showed revenue up 4.5% year over year to $6.59bn; the organic revenue part was up just 0.2% year over year. This was still better than the market expected, however, but adjusted operating income decreased 4.8% year over year due primarily to a decline in gross profit margin in the EMEA region even though organic sales increased. The addition of Magirus in the EMEA region has strengthened its competitive position in key technologies including virtualisation, storage and converged solutions, it says.
Rick Hamada, Avnet's Chief Executive Officer, says "Given our confidence in and commitment to long-term shareholder value creation, we believe now is an appropriate time to incorporate a more consistent element of returning capital to shareholders in the form of a dividend. Our focus on value-based management and success in growing the Company has resulted in a cash flow from operations profile which, when combined with our strong balance sheet, provides us the financial flexibility to prioritize this commitment into our longer-term capital allocation strategy. Going forward, we will maintain our disciplined approach to profitable growth that continues to emphasize organic growth, value-creating acquisitions and share repurchases when appropriate."
The Board anticipates declaring this dividend in future quarters on a regular basis; however, future declarations of dividends are subject to Board approval and may be adjusted as business needs or market conditions change, it says.