Dividends
The Directors will seek to return a dividend of between 50% and 100% of Base Free Cash Flow from the Group (normalised for maintenance levels of capital investment), subject to targeting a Group gearing ratio below 35% exclusive of lease liabilities, and 50% inclusive of lease liabilities, over a rolling five year term 4 , while giving consideration to the performance of the business and changing financial conditions. Actual dividend payments will also remain subject to both solvency test and banking covenant restrictions. In determining dividend levels, the Board will balance the objective of providing a stable or increasing dividends to the Shareholder against short-to-medium term investment requirements and prudent risk management. Specific dividend forecasts for the planning period, with respect to base free cashflow parameters, are set out opposite. Gearing (including and excluding leases) for the 5 years from FY18/19 is forecast to remain within the policy limits outlined above. The level of dividend will be reviewed annually as part of the business planning process and at each declaration date. Dividends are usually paid in October and February and a final dividend not later than 30 June of each year.
Dividends vs free cashflow limits ($m)
30
20
10
0
FY19 (Forecast)
FY20 (Plan)
FY21 (Plan)
FY22 (Plan)
Dividends
100% of FCF 50% of FCF
4. Dividends are payable where average gearing over the next 5 year period remains below policy levels and there is no individual year where gearing exceeds 40% exclusive of leases or 55% inclusive of leases.
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