Dividend Finalisation Announcement

RNS Number : 8508B

Capital & Regional plc

25 September 2018

 

25 September 2018

CAPITAL & REGIONAL PLC ("Capital & Regional" or "the Company")

UK company number 01399411

LSE share code: CAL             

ISIN: GB0001741544

LEI: 21380097W74N9OYF5Z25

Dividend Finalisation Announcement

Further to the announcement made by the Company on 14 August 2018 a final dividend of 1.82 pence per share (the "Dividend") has been declared, to be paid 100% as a property income distribution ("PID"). The PID will be subject to a deduction of a 20% UK withholding tax unless exemptions apply.

The Dividend is payable on Thursday, 25 October 2018 to shareholders registered on the UK principal register ("UK Shareholders"), and the South African branch register ("SA Shareholders").  The Record Date for both UK Shareholders and SA Shareholders is at the close of business on Friday, 5 October 2018.

The Directors are offering a scrip alternative ("scrip alternative") to the Dividend, further details of which are contained in the Scrip Dividend Rules available from https://capreg.com/media/1715/scrip-scheme-rules.pdf and from the Company's Registrars. A cash dividend will be paid to shareholders unless they elect to receive the scrip alternative. 

Capitalised terms used in this announcement will be the same meaning as defined in the Scrip Dividend Rules.

(i) Shareholders receiving the dividend in cash:

SA shareholders are advised that the exchange rate for the dividend will be 18.72 ZAR to 1.00 GBP (the "Exchange Rate"), resulting in a gross local dividend amount of 34.07040 ZAR cents per share.  Accordingly, shareholders who do not elect to receive New Ordinary Shares pursuant to the Scrip Dividend Scheme will be paid a cash dividend per share as follows:

PID	UK Shareholders (GBP pence)	SA Shareholders (ZAR cents)
Gross amount of PID	1.82p	34.07040
Less 20% UK withholding tax *	0.364p	6.81408
Net PID dividend payable**	1.456p	27.25632
Less effective 5% SA dividends tax for SA Shareholders***	n/a	1.70352
Net PID dividend payable***	n/a	25.55280

* Certain categories of UK shareholders may apply for exemption, in which case the PID element will be paid gross of UK withholding tax. 

** Net position after deducting UK withholding tax for both UK and SA Shareholders, but before SA shareholders have claimed back 5% from HMRC under the double tax agreement between the United Kingdom and South Africa in respect of the UK withholding tax.

*** SA dividends tax applies at the rate of 20% for SA Shareholders, but SA Shareholders receive a rebate of the UK withholding taxes suffered (which is effectively 15%,  after taking into account the 5% refund).

(ii) Shareholders who elect to take shares:

The Scrip Calculation Price for UK shareholders is 41.64 pence, being the average of the middle market quotations of an Ordinary Share derived from the Daily Official List of the LSE for the last five dealing days ending on 24 September 2018, less the gross amount of Dividend per share. The Scrip Calculation Price for SA shareholders is 7.79501 ZAR, being the Scrip Calculation Price for UK shareholders, converted to Rand at the Exchange Rate.

The number of New Ordinary Shares to be allocated to shareholders electing to participate in the Scrip Dividend Scheme will be calculated by dividing the net value of the Dividend otherwise receivable by a Shareholder by the Scrip Calculation Price and rounding down to the nearest whole number. As no fraction of a new share will be issued, for UK shareholders any residual Cash Balance, i.e. the total value of the dividend receivable less the value of the shares allocated, will be rolled forward and factored into the Scrip calculation for the next relevant Dividend.  For SA shareholders, any residual Cash Balance will be paid in cash in the same way as the Dividend would have been paid had those shareholders not elected to receive the scrip alternative.

By way of illustration, a shareholder who holds 1,000 shares, and who elects to receive New Ordinary Shares pursuant to the Scrip Dividend Scheme, will receive a number of New Ordinary Shares calculated as follows:

PID	UK Shareholders (GBP £)	SA Shareholders (ZAR)
PID dividend net of UK withholding tax entitled to receive* (As per (i) above x 1,000):	1.456p x 1000 = £14.56	272.56 ZAR
Scrip Calculation Price	£0.4164	7.79501ZAR
Calculated number of new shares to which shareholder is entitled	34.96638	34.96596
Actual number of new shares received	34	34
Gross Cash Balance (multiply fractional entitlement by Scrip Calculation Price)	£0.40	7.53 ZAR
Less effective 5% SA dividends tax on the cash balance payable (SA Shareholders)**	n/a	0.38 ZAR
Net Cash Balance***	£0.40	7.15 ZAR

* A scrip dividend is not subject to SA dividends tax, therefore no SA dividends tax is deducted for SA Shareholders in this instance, only UK withholding tax. SA shareholders may claim back 5% from HMRC under the double tax agreement between the United Kingdom and South Africa in respect of the UK withholding tax

** SA dividends tax applies at the rate of 20% for SA Shareholders on the cash portion, but SA Shareholders obtains a rebate of the UK withholding taxes suffered (which is effectively 15% after taking into account the 5% refund)

*** For SA Shareholders to be paid a Cash Balance, the Cash Balance will be subject to 20% SA dividends tax. The Net Cash Balance due to SA Shareholders has been determined after taking SA dividends tax and UK withholding tax into account in the same manner as a cash PID dividend.

TIMETABLE

The key dates in relation to the payment of the Dividend are:

	2018
Last day to trade (SA shareholders)	Tuesday, 2 October
Shares trade ex-dividend on the JSE	Wednesday, 3 October
Shares trade ex-dividend on the LSE	Thursday, 4 October
Record date	Friday, 5 October
Closing date to elect to receive the scrip alternative (JSE and LSE shareholders)	Friday, 5 October
Announcement of the total amount of new shares to be issued	Monday, 15 October
Dispatch of share certificates, payment of cash dividend and residual cash balances (if applicable), CREST/CSDP/broker accounts credited/updated and new shares listed	Thursday, 25 October

Notes:

1.       JSE shareholders will receive a cash dividend in South African Rand, based on the conversion rate.

2.       Share certificates (in respect of shares held on the South African register) may not be demateriliased or rematerialised between Wednesday, 3 October 2018 and Friday, 5 October 2018, both days inclusive.

3.       Transfers of shares between sub-registers in the United Kingdom and South Africa may not take place between Tuesday, 25 September 2018 and Friday, 5 October 2018, both days inclusive.

4.       Shareholders should note that new shares should not be traded until they are issued or reflected in their respective accounts.

 

TAX IMPLICATIONS FOR SA SHAREHOLDERS

Portion of the distribution that constitutes a PID

Cash PID

A 20% UK withholding tax will be deducted from cash PIDs. The Company will account to Her Majesty's Revenue & Customs ("HMRC") in sterling for the total UK withholding tax deducted.  Under the double tax agreement between the UK and South Africa ("the DTA"), the maximum tax payable in the UK is 15%. South African resident shareholders are therefore entitled to claim a 5% rebate from HMRC in terms of the DTA.

SA dividends tax, at a rate of 20%, will apply to cash PIDs to the extent that the Company shares are held on the SA share register, unless the beneficial owner of the dividend is exempt from dividends tax (e.g. if it is a South African resident company).  SA resident shareholders can, however, claim a rebate against the SA dividends tax for any UK withholding tax suffered. Accordingly, 15% of the UK withholding tax may be claimed as a rebate against the 20% SA dividends tax.

In summary, therefore, 20% will be withheld in the UK, a further 5% will be withheld in SA (where appropriate), but South African resident shareholders will be entitled to claim back 5% from HMRC which will bring the overall total to 20%.

New shares issued pursuant to the scrip alternative consisting of PID element

A 20 per cent UK withholding tax will have been deducted in calculating the number of new shares issued to shareholders in terms of the Scrip Dividend Scheme. On application by a JSE shareholder, a 5% rebate is claimable from HMRC, resulting in an effective UK withholding tax rate of 15%. As new shares issued pursuant to the scrip alternative should not constitute dividends or foreign dividends for South African dividends tax purposes, South African dividends tax does not apply to that part of any dividend satisfied by the issue of new shares where such new shares are provided in lieu of the dividend. Cash balances paid are expected to be taxed as a cash PID, as set out above.

UK taxation

The receipt of the cash dividend or election to receive the scrip alternative may have tax implications for shareholders who are resident in the United Kingdom or other countries and such shareholders are advised to obtain appropriate advice from their professional advisors in this regard.

- ENDS -

For further information:

Capital & Regional:	Tel:  [phone]
Lawrence Hutchings, Chief Executive
FTI Consulting:	Tel: [phone]
Richard Sunderland Claire Turvey [e-mail]

Notes to editors:

About Capital & Regional plc

Capital & Regional is a UK focused retail property REIT specialising in shopping centres that dominate their catchment, serving the non-discretionary and value orientated needs of the local communities.  It has a strong track record of delivering value enhancing retail and leisure asset management opportunities across a c. £1 billion portfolio of in-town shopping centres.  Capital & Regional is listed on the main market of the London Stock Exchange and has a secondary listing on the Johannesburg Stock Exchange.   

Capital & Regional owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green. It also has a 20% joint venture interest in the Kingfisher Centre in Redditch. Capital & Regional manages these assets through its in-house expert property and asset management platform.

For further information see capreg.com.

 

END

 

 

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