MONTREAL — Home renovations retailer Rona Inc. (TSX:RON) is raising its dividend 14 per cent after reporting that its net profit grew nearly 19 per cent in its second quarter on higher sales.
The Quebec-based company said it earned $49.9 million or 46 cents per share for the three months ended June 28. That's up from $42 million or 35 cents per share a year earlier.
Rona also announced it will pay a quarterly dividend of four cents per share on Sept. 25.
In the past, it paid a 14 cents per share annual dividend distributed twice a year, but it will now move to a quarterly payout.
Revenues increased 5.9 per cent to $1.26 billion from $1.19 billion a year ago.
Rona was expected to earn 45 cents per share on $1.25 billion of revenues, according to analysts polled by Thomson Reuters.
The company says retail sales grew 6.7 per cent due to merchandising strategies and the repositioning of the Reno-Depot banner in Quebec, while distribution sales rose 3.7 per cent.
Retail same-store sales — a key measure for sales from stores open at least a year — grew 5.4 per cent, well above analyst expectations.
Rona CEO Robert Sawyer says the company marked a fourth consecutive quarter of growth despite the ongoing decline in housing starts across the country and a stagnant economy.
Over the past year, the company has repurchased 11 million shares or 9.2 per cent of its outstanding shares.
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