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Rona enjoys a fourth consecutive quarter of growth

Rona enjoys a fourth consecutive quarter of growth
The quarterly results were also enhanced by a 14% dividend

Shares of retailer and distributor Rona (TSE:RON) were trading 3.3% higher today, even after announcing slightly lower than expected earnings.

In the second quarter, Rona posted earnings per share of C$0.46 or 31% higher than the comparable period of 2014, but analysts surveyed by Bloomberg had forecast C$0.47 a share.

Revenue increased 5.8% to $ 1,293 million. Net income $ 50 million advance of 19.1%. Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $ 96.9 million, or 7.7% of revenue, compared with 89.1 million, or 7.5% of revenue, in the second quarter 2014.

Rona did show strong growth a same-store sales, a key indicator of organic growth, rose 5.4%. Moreover, this was the Quebec based retailer’s fourth consecutive quarter of growth even as housing starts have been dropping according to the company’s chief executive Robert Sawyer:

“This performance underscores the success of the various merchandising and banner repositioning strategies we implemented just over a year ago,” said Sawyer in a statement.

The quarterly results were also enhanced by a 14% dividend, which will now be paid quarterly rather than twice per year. The annual dividend is $ 0.16 per share.

National Bank Financial recently reiterated a "sector perform" recommendation with a target of C$17.50 for Rona, which was trading at C$15.50 at noon

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