Mobile phone operator O2 cheered shareholders yesterday with a larger than expected maiden dividend after annual profits more than tripled.
Slough-based O2 said it was proposing to pay shareholders an inaugural final dividend of 2.25p per share - well above the 1.83p payout the City had been expecting.
The payout represents some 40 per cent of the group's underlying earnings per share on an annualised basis, and the group reaffirmed its commitment to returning 50 per cent of profits to shareholders over the medium-term.
"Next year we intend to grow the dividend towards the 50 per cent medium-term term target - we're confident that the dividend will continue to climb," said chief executive Peter Erskine.
A 16 per cent rise in customers to 23.96 million helped 02 rack up annual pretax profits of £309 million for the year to March 31 against £95 million last time.
Chairman David Arculus said the group had delivered another year of strong revenue and profit growth, with revenues up more than 18 per cent and underlying earnings per share 63 per cent ahead of last year.
"All of O2's businesses performed well during the year," he said.
O2 said group revenues rose by 18.4 per cent to £6.7 billion, while operating profits were up 73.6 per cent to £ 755 million against £435 million last time.
It added that it had reduced its net debt by £288 million to £78 million.
O2 said its UK division grew customers by 8.4 per cent to 14.38 million and service revenues by 13.9 per cent to £3.6 billion.
The division is hiring about 2,000 extra retail and customer service staff in the next two years.