Mirror 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 mirror shareholder in July 2021. While you’re in the 1+1 Mirror Plan you will be eligible to receive a mirror dividend payment, whenever the company chooses to declare a dividend. In this edition of 1+1 News you’ll find out more about dividends and mirror 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 a 1+1 Mirror Plan participant?

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 you are not the owner of any real Kingfisher shares you are not eligible to receive actual dividends. However, as a 1+1 Mirror Plan participant you had a number of Mirror Purchased Shares allocated to you on 21 July 2021. This allocation date fell well before the ex-dividend date of 7 October 2021 meaning you are eligible to receive the mirror dividend payment of 3.8 pence in respect of each of your Mirror Purchased Shares.

The mirror dividend you receive in relation to your Mirror Purchased Shares will be reinvested to allocate more mirror shares called Mirror Dividend Shares. The value of dividends that would have been paid to you if you had owned the number of actual Kingfisher shares equal to the number of your Mirror Matching Shares from July 2021 will be reinvested into Mirror Matching Dividend Shares. Provided you keep all your Mirror Purchased Shares and Mirror Dividend Shares in your account until July 2022, you will be given ownership of both the Mirror Matching Shares and the additional Mirror Matching Dividend Shares.

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

What do I need to know?

There’s nothing you need to do to receive your mirror dividend shares. Once the dividend has been paid on 12 November 2021 we will prepare a mirror plan statement for you including your mirror dividend shares. You can expect to receive this document towards the end of November.

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 Vietnam here. It is important that you read the relevant Tax Guide because you may 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.