iSelect (ASX:ISU) share price edges higher on special dividend

iSelect Ltd (ASX: ISU) shares are trekking higher after the company announced a special dividend and dividend program. We take a closer look.

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iSelect Ltd (ASX: ISU) shares are trekking higher after the company announced a special dividend and dividend program. This comes after the price comparison website operator’s shares delivered a mixed performance for its first-half results.

At the time of writing, the iSelect share price is swapping hands for 31 cents, up 3.3%.

Special dividend and dividend program

Investors appear to be pushing iSelect shares higher today, taking up the company’s latest dividend offer.

According to the release, iSelect state that working capital outflow associated with trail revenue is continuing to decrease. The positive trend is expected to remain for the foreseeable future.

In light of this, the board evaluated a number of capital management options over the past year, including acquisition targets. However, after careful consideration, iSelect has determined to reward shareholders with a special dividend. In addition, a regular dividend program will follow in FY22.

iSelect has agreed to pay a special unfranked dividend of 1 cent per share on 22 June 2021. The ex-dividend date (in which you must own the shares) is 1 June 2021.

In addition, the company noted that it will continue a regular dividend program at an initial price of 1 cent per share every half-year. The dividends will be unfranked. This will occur until a sufficient franking balance can be accumulated. The first payment in the program will take place in March 2022.

So how did iSelect perform in the first half of FY21?

It was a mixed result for iSelect over the six-month period ending 31 December 2020.

Revenue fell to $51.8 million, a 12% drop on the prior corresponding period. This was primarily due to the COVID-19 impact on consumer demand, and operating model changes in Q4 FY20.

Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $13.2 million, an increase of 724% over H1 FY20. Management focusing on cost has underpinned the strong performance. This saw a 15% reduction in overhead expenses.

Net profit after tax (NPAT) jumped to $5.5 million, compared to a $2 million loss over the same time last year.

About the iSelect share price

In the past 12 months, the iSelect share price has been a decent performer, rising close to 50%. Year-to-date, however, the company’s shares have only managed to gain around 8%.

iSelect has a market capitalisation of roughly $67 million, with 217.8 million shares on issue.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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