Vector > Corporate > Investor relations > Dividends

Dividends

The below chart demonstrates the growth in Vector’s declared dividend since listing in 2005.
 
 
 
Declared dividends
 
To date the following dividends payments have been announced/made:
 
Dividend Record date Payment date Amount
2012 Interim Dividend 30 March 2012 16 April 2012 7.0
2011 Final Dividend 12 September 2011 19 September 2011 7.5
2011 Interim Dividend 31 March 2011 14 April 2011 6.75
2010 Final Dividend 3 September 2010 13 September 2010 7.5
2010 Interim Dividend 31 March 2010 14 April 2010 6.5
2009 Final Dividend  8 September 2009 15 September 2009 7.25
2009 Interim Dividend 31 March 2009 14 April 2009 6.5
2008 Final Dividend 11 September 2008 18 September 2008 6.75
2008 Interim Dividend 31 March 2008 10 April 2008 6.5
2007 Final Dividend 29 August 2007 4 September 2007 6.5
2007 Interim Dividend 30 March 2007 10 April 2007 6.5
2006 Final Dividend 28 August 2006 31 August 2006 6.0
2006 Interim Dividend 31 March 2006 7 April 2006 6.0
 
Dividend calculator
 

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Dividend policy
 
Our company's policy is to distribute to shareholders all funds surplus to the investment and operating requirements of the company as determined by the board with a target dividend payout ratio in respect of each financial year of 60% of free cash flows but subject always to:
  1. The solvency requirements of the Act;
  2. Any banking or other funding covenants by which the company is bound from time to time;
  3. The investment and operating requirements referred to in this clause 5.1; and
  4. Maintaining an investment grade credit rating from Standard & Poors or another credit rating agency of similar standing.
The target dividend payout ratio set out in this clause is not to be changed in any manner which results in a lower level of payments to the company's shareholders without the prior written agreement of the Trust, for such time as the Trust is a majority shareholder.
 
In measuring the company's performance against the target dividend payout ratio in relation to a financial year, the parties acknowledge that the board shall seek to maintain consistency from year to year by smoothing the effect of any variation in free cash flows that may be due to one off gains or losses in individual years, while maintaining the target dividend payout ratio on average over time.
 
For the purposes of this clause 5:
  1. "Free cash flows" means net cash flows arising from operating and financing activities less replacement capital expenditure outflows; and
  2. "Replacement capital expenditure" means expenditure incurred to replace existing assets to enable the network to maintain a similar level of operational performance.

Tax on dividends

Generally, Vector's dividends will have imputation credits attached. New Zealand tax resident shareholders may be able to use these imputation credits to reduce their New Zealand income tax liability on the gross dividend amount.

Vector will attach imputation credits based on the tax Vector has paid. As Vector's income tax rate from 1 July 2011 is 28%, and this is lower than the income tax rate of many individuals, some shareholders may have additional income tax to pay on a Vector dividend. We recommend that shareholders seek their own tax advice to determine the tax implications of a dividend derived from Vector.