Why dividend yield at Coulson’s Ardagh Metal is safer than market fears

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Share price slump of beverage can marker since it floated two years ago leaves its dividend yield at eyewatering 11%

The business went public through a reverse merger of the beverage cans maker in early August 2021 into one of the listed blank cheque companies – or special purpose acquisition companies – that were all the rage on Wall Street at the time.

AMP’s earnings declined 6 per cent last year amid softer demand for beverage cans on both sides of the Atlantic and as there was lag, particularly in Europe, in its ability to pass on soaring energy and other costs to customers. The consensus view among analysts is that AMP’s ebitda next year will come in at a little more than $750 million – about 32 per cent below its original target.

With the company set to report interim results next week, investors will be keen to see if it sticks to its forecast for ebitda to grow by 10 per cent for the year as a whole. It all hangs on the second half of the year, as Mr Coulson, the company’s chairman, and Mr Graham have guided that ebitda will decline for the first half.

Mr Graham has repeatedly insisted that the dividend is sustainable, particularly as its massive investment programme winds down and cash flow ramps up in the coming years.

 

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