The board of retailer Next has been forced to call a general shareholder meeting next month after finding a technical infringement of the Companies Act 2006 in respect of the payment of the dividends.
The issue relates to the dividends paid in February 2014 and three dividend payouts in 2015. The company said it always had sufficient reserves to pay the dividends at the time that they were made, but the Companies Act requires this to be demonstrated by reference to interim accounts filed at Companies House prior to payment. However, the interim accounts were not filed with Companies House until after the dividends had been paid and after the lapse had been identified. Next said it had not incurred any fines or other penalties for the breach of the Act.
Next said the matter was of an “historic nature and there is no change to the financial outlook of the Company as a consequence of this technical matter. It also has no impact on the Company’s intentions or ability to continue returning its surplus cash flow to shareholders via future Special Dividends or Share Buybacks. The Company’s past accounts will not need to be restated and no dividends are expected to be repaid.”
The company will propose a single resolution at the general meeting on 10th February which will, if passed, address the situation and put all parties back in the position they were intended to be had the full technical requirements of the Act been complied with at the time the dividends were paid.
Manifest’s analysis of this meeting notes that the directors and the former directors have undertaken to abstain, and to take all reasonable steps to ensure that their associates abstain, from voting on the resolution, following advice from UBS, in its capacity as the Company’s sponsor.
Next is not the only company to have fallen foul of this requirement. In the past year we have identified 10 companies who have had to take remedial action.
|Accounts not Lodged||Vote in favour at GM
|Next plc||GM||10 Feb 2016||FTSE 100||Interim||TBC|
|Castle Street Investments Trust plc||GM||20 Jan 2016||FTSE AIM||–||Passed|
|Poundland Group plc||AGM||17 Sept 2015||FTSE 250||Interim||99.99%|
|SSE plc||AGM||23 July 2015||FTSE 100||Interim||99.85%|
|Central Asia Metals plc||AGM||17 June 2015||FTSE AIM 100||Interim||Passed|
|Foxtons Group plc||AGM||7 May 2015||FTSE 250||Interim||100%|
|STV Group plc||AGM||30 Apr 2015||FTSE SmallCap||Interim||100%|
|Al Noor Hospitals plc||AGM||29 Apr 2015||FTSE 250||Interim||100%|
|Wm Morrison Supermarkets plc||GM||6 Mar 2015||FTSE 100||Interim||99.7%|
|Treatt plc||AGM||30 Jan 2015||FTSE Fledgling||Interim||99.82%|
|Source: Manifest Information Services Ltd|
Manifest has passed its findings with ICSA, the Institute of Chartered Secretaries & Administrators.