Capital & Regional plc Dividend Finalisation Announcement (3909K)

TIDMCAL

RNS Number : 3909K

Capital & Regional plc

10 April 2018

10 April 2018

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

UK company number 01399411

LSE share code: CAL

ISIN: GB0001741544

LEI: 21380097W74N9OYF5Z25

DIVID FINALISATION ANNOUNCEMENT

Further to the announcement made by the Company on 8 March 2018 a final dividend of 1.91 pence per share (the "Dividend") has been declared, subject to approval by the shareholders of the Company at the Annual General Meeting to be held on Wednesday, 9 May 2018. Shareholders are now advised that the dividend will be paid as follows:

- 1.63 pence (85%) will comprise a property income distribution ("PID"). The PID will be subject to a deduction of a 20% UK withholding tax unless exemptions apply.

- 0.28 pence (15%) will comprise a non-PID. The non-PID will be treated as an ordinary UK company dividend, with no UK withholding tax deducted.

The Dividend is payable on Wednesday, 16 May 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, 20 April 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 http://capreg.com/investor-info/scrip/ 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 17.132 ZAR to 1.00 GBP (the "Exchange Rate"), resulting in a gross local dividend amount of 32.72212 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:

 
                                  UK Shareholders   SA Shareholders 
 PID                                  (GBP pence)       (ZAR cents) 
-------------------------------  ----------------  ---------------- 
 Gross amount of PID                        1.63p    27.92516 cents 
-------------------------------  ----------------  ---------------- 
 Less 20% UK withholding tax 
  *                                        0.326p     5.58503 cents 
-------------------------------  ----------------  ---------------- 
 Net PID dividend payable**                1.304p    22.34013 cents 
-------------------------------  ----------------  ---------------- 
 Less effective 5% SA dividends 
  tax for SA Shareholders***                  n/a     1.39626 cents 
-------------------------------  ----------------  ---------------- 
 Net PID dividend payable***                  n/a    20.94387 cents 
-------------------------------  ----------------  ---------------- 
 

* 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).

 
                                 UK Shareholders   SA Shareholders 
  Non-PID*                           (GBP pence)       (ZAR cents) 
------------------------------  ----------------  ---------------- 
 Non-PID element                           0.28p     4.79696 cents 
------------------------------  ----------------  ---------------- 
 Less 20% SA dividends tax for 
  SA Shareholders**                          n/a     0.95939 cents 
------------------------------  ----------------  ---------------- 
 Net Non-PID dividend payable              0.28p     3.83757 cents 
------------------------------  ----------------  ---------------- 
 

* Non-PID - taxed as a normal dividend for UK purposes, i.e. no UK withholding tax applicable.

** Certain categories of SA shareholders are exempt from SA dividends tax, e.g. SA resident companies.

(ii) Shareholders who elect to take shares:

The Scrip Calculation Price for UK shareholders is 51.77 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 9 April 2018, less the gross amount of Dividend per share. The Scrip Calculation Price for SA shareholders is 8.86924 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 (in respect of the PID element), will receive a number of New Ordinary Shares calculated as follows:

 
                                       UK Shareholders   SA Shareholders 
 PID                                         (GBP GBP)             (ZAR) 
------------------------------------  ----------------  ---------------- 
 PID dividend net of UK withholding 
  tax entitled to receive*               1.304p x 1000 
  (As per (i) above x 1,000):               = GBP13.04     223.40000 ZAR 
------------------------------------  ----------------  ---------------- 
 Scrip Calculation Price                     GBP0.5177       8.86924 ZAR 
------------------------------------  ----------------  ---------------- 
 Calculated number of new shares 
  to which shareholder is entitled            25.18833          25.18818 
------------------------------------  ----------------  ---------------- 
 Actual number of new shares 
  received                                          25                25 
------------------------------------  ----------------  ---------------- 
 Gross Cash Balance (multiply 
  fractional entitlement by Scrip 
  Calculation Price)                           GBP0.10          1.67 ZAR 
------------------------------------  ----------------  ---------------- 
 Less effective 5% SA dividends 
  tax on the cash balance payable 
  (SA Shareholders)**                              n/a          0.08 ZAR 
------------------------------------  ----------------  ---------------- 
 Net Cash Balance***                           GBP0.10          1.59 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.

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 (in respect of the non-PID element), will receive a number of New Ordinary Shares calculated as follows:

 
                                      UK Shareholders   SA Shareholders 
 Non-PID                                    (GBP GBP)             (ZAR) 
-----------------------------------  ----------------  ---------------- 
 Gross amount of non-PID dividend 
  entitled to receive 
  (Gross Non-PID per (i) above         0.28p x 1000 = 
  x 1,000):                                   GBP2.80      47.97000 ZAR 
-----------------------------------  ----------------  ---------------- 
 Scrip Calculation Price                    GBP0.5177       8.86924 ZAR 
-----------------------------------  ----------------  ---------------- 
 Calculated number of new shares 
  to which shareholder is entitled 
  (assuming no cash residual 
  balance brought forward)                    5.40854           5.40858 
-----------------------------------  ----------------  ---------------- 
 Actual number of new shares 
  received                                          5                 5 
-----------------------------------  ----------------  ---------------- 
 Gross Cash Balance (multiply 
  fractional entitlement by Scrip 
  Calculation Price)                    GBP0.21 pence          3.62 ZAR 
-----------------------------------  ----------------  ---------------- 
 Less 20% SA dividends tax on 
  the Cash Balance payable (SA 
  shareholders)*                                  n/a          0.72 ZAR 
-----------------------------------  ----------------  ---------------- 

 Net Cash Balance                       GBP0.21 pence          2.90 ZAR 
-----------------------------------  ----------------  ---------------- 
 

* 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 into account in the same manner as a cash non-PID dividend.

TIMETABLE

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

 
                                                                          2018 
----------------------------------------------------------  ------------------ 
 Last day to trade (SA shareholders)                         Tuesday, 17 April 
 Shares trade ex-dividend on the JSE                             Wednesday, 18 
                                                                         April 
 Shares trade ex-dividend on the LSE                              Thursday, 19 
                                                                         April 
 Record date                                                  Friday, 20 April 
 Closing date to elect to receive the scrip                   Friday, 20 April 
  alternative (JSE and LSE shareholders) 
 Annual General Meeting                                           Wednesday, 9 
                                                                           May 
 Announcement of the total amount of new shares                   Thursday, 10 
  to be issued                                                             May 
 Dispatch of share certificates, payment of                      Wednesday, 16 
  cash dividend and residual cash balances (if                             May 
  applicable), CREST/CSDP/broker accounts credited/updated 
  and new shares listed 
 
 

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, 18 April 2018 and Friday, 20 April 2018, both days inclusive.

3. Transfers of shares between sub-registers in the United Kingdom and South Africa may not take place between Tuesday, 10 April 2018 and Friday, 20 April 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.

Portion of the distribution that constitutes a non-PID

Cash Non-PID

No UK withholding tax is applicable to non-PID distributions.

SA dividends tax at the rate of 20% will apply to cash non-PIDs paid by the Company, unless the beneficial owner of the dividend is exempt from SA dividends tax (e.g. if the beneficial owner is a South African company or a non-South African resident). Since no withholding tax is suffered in the UK on cash non-PIDs, no rebate can be claimed.

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

No UK withholding tax will have been deducted in calculating the number of new shares issued to shareholders in terms of the Scrip Dividend Scheme to the extent that it consists of a non-PID element. 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 non-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.

For further information:

   Capital & Regional plc                     020 7932 8000 

Lawrence Hutchings

Charles Staveley

   FTI Consulting                                  020 3727 1000 

Richard Sunderland

Claire Turvey

Methuselah Tanyanyiwa

[e-mail]

About Capital & Regional plc

Capital & Regional is a UK focused specialist property REIT with a strong track record of delivering significant value enhancing retail and leisure asset management opportunities across its c. GBP1 billion portfolio of in-town, dominant community shopping centres.

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 www.capreg.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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April 10, 2018 03:30 ET (07:30 GMT)