UPDATE 1-Cash-rich Coloplast to boost shareholder rewards as beats forecasts
* Q4 EBIT 973 mln DKK vs 950 mln average forecast
* Changes dividend policy
* Launches share buyback of 1 bln DKK, dividend of 7 DKK
* Forecasts 33 pct operating margin, 7 pct organic revenue growth
COPENHAGEN, Oct 31 (Reuters) - Danish healthcare products maker Coloplast is to boost returns to shareholders and expects a rise in operating profit and sales growth this year, it said on Thursday after upbeat earnings figures.
The company, which sells healthcare products ranging from ostomy and urine bags to wound dressings, has benefited from Europe's ageing population to become one of the most efficient companies in its sector.
It said in a statement it would no longer keep a minimum cash reserve of 1 billion crowns ($184.63 million) and instead disburse excess liquidity to shareholders via dividends and share buy-backs.
"We change the dividend policy because we generate more liquidity than we can currently invest in the business," Chief Financial Officer Lene Skole told Reuters.
Coloplast, with a market capitalisation of $12.1 billion, said it would pay dividends twice a year and launched a new 1 billion crown share buy-back programme.
Coloplast reported a 16 percent rise in free cash flow to 2.70 billion crowns, and proposed an ordinary dividend of 7 crowns per share.
The company forecast operating margin of around 33 percent at constant exchange rates and in Danish crowns, and revenue growth of about 7 percent in the 2013/14 financial year.
That compares with operating margin growth of 32 percent in the 2011/12 financial year and sales growth of 6 percent.
For the fourth quarter, earnings before interest and tax (EBIT) rose 4 percent to 973 million Danish crowns ($179.65 million), beating an average forecast of 950 million in a Reuters poll..
With a price to book ratio of 28.6, Coloplast is among the three most highly valued stocks in the Thomson Reuters Europe Medical Equipment Supplies and Distribution Index.
It has the highest return on equity in the index at 36.3 percent and the second highest operating margin at 29.5 percent, Reuters data show.
Coloplast has few listed direct competitors, but its peer group of comparable companies includes global medical technology business Smith & Nephew.
Its shares traded up 7.4 percent at 1321 GMT, outperforming a 0.6 percent fall in the Copenhagen stock exchange's benchmark index.