Dividends – what they are, your upcoming dividend payment and what you need to do

As a participant of the 1+1 Sharing in Our Future Plan you became a Kingfisher shareholder in July 2021. Not only does that entitle you to vote at the next Kingfisher Annual General Meeting (AGM) in 2022, but it also means that you will be eligible to receive a dividend payment, whenever the company chooses to declare one. In this edition of 1+1 News you’ll find out more about dividends, including what they are, how they work, and most importantly what you need to do.

What is a dividend?

A dividend is a payment a company makes to share its profits with its shareholders. They’re paid on a regular basis, and they are one of the ways that shareholders earn a return from investing in shares. Each dividend payment is set at a fixed amount which will be paid per share. For example, the next Kingfisher dividend payment due to be paid in November will be 3.8 pence per share. An eligible shareholder who holds 100 shares will receive a dividend of £3.80 in value (100 x 3.8 pence).

How often are dividends paid and what are the key dates?

Dividend timings ordinarily follow a company’s regular financial reporting schedule. Companies review their performance, and the Directors must decide whether payment of a dividend is appropriate. On rare occasions a company may make an out-of-cycle payment referred to as a special dividend, these often follow exceptionally strong performance or the sale of an asset. The key dates related to dividend payments are as follows:

• Announcement date – the date the dividend is announced, most often alongside a company’s results announcements
• Ex-dividend date – the date on, or after which, a new shareholder entered on the register of shareholders would not be eligible to receive a particular dividend
• Record date – the date a shareholder must be on the company’s register of shareholders to be eligible to receive a dividend (usually the day after the ex-dividend date)
• Payment date – the date the dividend is paid to shareholders

What does this mean for me as both a 1+1 Plan participant and Kingfisher shareholder?

Kingfisher has typically paid dividends twice a year: an ‘interim dividend’ half-way through the financial year often paid in November and a ‘final dividend’ following the end of the financial year often paid in July. In the half-year results published on 21 September 2021, Kingfisher announced a dividend of 3.8p with a payment date of 12 November 2021.

As a 1+1 Plan participant you own a number of Purchased Shares bought on 21 July 2021. The purchase date fell well before the ex-dividend date of 7 October 2021, meaning you are eligible to receive the dividend payment of 3.8 pence in respect of each of your Purchased Shares. The dividend you receive in relation to your Purchased Shares will be reinvested to buy more real Kingfisher shares called Dividend Purchased Shares. As you are not the owner of your Matching Shares until July 2022, you are not eligible to receive a dividend payment on those shares. However, the value of dividends that would have been paid to you had you owned the Matching Shares from July 2021 will be reinvested into Dividend Matching Shares. Provided you keep all your Purchased Shares and Dividend Purchased Shares in your account until they vest in July 2022, you will be given ownership of both the Matching Shares and the additional Dividend Matching Shares.

If there are not enough funds from the dividend to buy a whole share, the residual amount will be held by Computershare and rolled forward. This amount will be added to any future dividends to purchase more shares on your behalf.

What do I need to know?

There’s nothing you need to do to receive your dividend or manage the reinvestment into additional shares. Once the dividend has been paid on 12 November 2021, Computershare will start the reinvestment process on your behalf. Once this has completed in approximately fourteen days Computershare will send you an email with a link to your individual dividend statement which will be held in your Documents’ Library on the EquatePlus portal. You will also be able to see your Dividend Purchased Shares and Dividend Matching Shares on the EquatePlus portal from this point.

What do I need to do?

There are tax consequences of participating in the 1+1 Plan which vary according to your location and personal circumstances. We have provided summaries in the Tax Guides available on the kingfisher-shareplan.com microsite. You can view the Tax Guide for Hong Kong here. It is important that you read the relevant Tax Guide because it is likely that you will need to take action in respect of your dividend shares. If you feel that you need legal or tax advice you should seek your own personal advice from an appropriately qualified person.

How can I find out more?

You can find out more about the 1+1 Plan, including examples of how dividends work under the plan, at kingfisher-shareplan.com. You can also view and manage the value of your plan, including Dividend Purchased Shares and Dividend Matching Shares once they have been added, by logging into the EquatePlus portal at equateplus.com.