One of the worst performers on the All Ordinaries index on Wednesday has been the Accent Group Ltd (ASX: AX1) share price.
In afternoon trade the footwear-focused retail group's shares are down 8% to $1.47.
Why is the Accent Group share price sinking lower?
Whilst the market volatility due to the coronavirus outbreak is playing a role in the company's share price weakness today, it isn't the only reason its shares are falling.
Also weighing on its shares today is the fact that they are trading ex-dividend for the company's interim dividend.
When a company's shares trade ex-dividend, they trade without the rights to an upcoming dividend payment. This generally leads to the share price falling to reflect the fact that new buyers will not be entitled to it.
Accent Group's dividend.
Last month Accent Group released its half year results and revealed a 14.1% increase in sales to $444.2 million and a 9.7% lift in net profit after tax to $35.3 million. This was achieved despite the company facing tough trading conditions in the retail market.
Management also revealed that it has started the second half in a positive fashion. Like for like sales grew 3% during the first seven weeks of the half.
This strong performance and its positive outlook allowed the Accent Group board to grow its dividend once again. It declared a fully franked interim dividend of 5.25 cents per share, up 16.7% on the prior corresponding period. This dividend will be paid to eligible shareholders on March 19.
The company's chairman, David Gordon, said: "The growth in the interim dividend signals the confidence of the Board in the performance and financial strength of the Group."
"The Group's growth plan remains on track with the management team objectives linked to shareholder outcomes through the company's long-term incentive plan which requires compounding earnings per share growth of at least 10% per annum. The Board remains committed to return excess cash to shareholders over time and dividend payments will reflect the cash requirements of the business as we continue to invest in growth," he added.
Also falling for the same reasons today are the shares of investment company Perpetual Limited (ASX: PPT) and wine giant Treasury Wine Estates Ltd (ASX: TWE).
