Dividends are the way in which the Company makes distributions from its profits to shareholders. In normal circumstances, Rentokil Initial pays dividends twice a year, and the level of each dividend is decided by the Company's directors. A dividend is paid for each share, so the amount you receive depends on the number of shares you own at the record date. It can be paid in cash or used to buy more shares.
In the current circumstances relating to COVID-19, and as indicated in the trading update issued on 25 March 2020, the Board of Directors of Rentokil Initial plc have taken the decision to suspend dividend payments for the time being and therefore will not be recommending the payment of the final dividend as announced with the Preliminary Results on 27 February 2020 and as stated in the 2019 Annual Report. Accordingly, no dividend resolution is now being proposed in the Notice of Meeting for the 2020 AGM and no final dividend will be paid.
'Record date' and 'ex-dividend' date
A dividend is paid based on the number of shares held on the share register at the record date, which is one day after the ex-dividend date. If you receive a dividend and are not sure if you are entitled to it, you should contact the agent who sold your shares for you.
The ex-dividend date is a specific date, occurring after the dividend has been declared, after which buyers are no longer entitled to receive the last declared dividend. This is known as going 'ex-dividend' and before this date the shares are said to be 'cum-dividend'. If you buy shares before the ex-dividend date, you are entitled to the recently declared dividend. If you buy shares on or after that date, the previous owner of the shares (and not you) is entitled to the dividend.
Payment of dividends
If you are a shareholder who has a UK bank/building society account, you can arrange to have dividends paid direct via a bank/building society mandate. Rentokil Initial plc no longer pays dividends by cheque.
If dividends are paid direct to your bank or building society account through the BACS system, it avoids the risk of cheques being lost in the post and your dividend will be in your account on the day the payment is made. To have dividends paid directly to your bank or building society account, simply contact the Company’s Registrar, Equiniti.
If you do not have a UK bank or building society account, you may be able to arrange for payments to be converted and paid in your local currency using the Equiniti Overseas Payment Service. This service pays in over 83 currencies to over 90 different countries.
You will receive a dividend confirmation by post setting out details of the dividend paid to you at the time.
Alternatively, the company offers a Dividend Reinvestment Plan (DRIP), which is a low cost way to use your dividend payments to purchase additional shares in the Company, enabling you to increase your shareholding in a convenient and cost-effective manner. The DRIP is operated by Equiniti Financial Services Limited (EFSL). Rather than having a bank account credited with a cash dividend payment, ESFL will use the dividends payable to DRIP participants to purchase shares on their behalf in the market, under a special low-cost dealing arrangement.
Any shareholder wishing to join the DRIP should contact EFSL for an application form, using the contact details provided below.
Tel: 0333 207 6581
Overseas: +44 (0)121 415 0077
Changes to dividend taxation
The Government has announced that from 6 April 2018 the Dividend Tax Credit will be replaced by a new tax-free Dividend Allowance. This will be in the form of a 0% tax rate on the first ￡2,000 of dividend income per year.
UK residents will pay tax on any dividends received over the ￡2,000 allowance at the following rates:
- 7.5% on dividend income within the basic rate (20%) band
- 32.5% on dividend income within the higher rate (40%) band
- 38.1% on dividend income within the additional rate (45%) band
Dividends paid on shares held within pensions and Individual Savings Accounts (ISAs) will continue to be tax free. Further information is available from HMRC. Please go to www.gov.uk/tax-on-dividends
IMPORTANT: You will be required to retain details of any dividend payments you receive and complete Tax Returns where required. For further advice please contact a tax or financial advisor who in the UK must be authorised by the Financial Conduct Authority.