Investors / Dividends

DIVIDENDS


Declared dividends

The table below demonstrates the growth in Vector's declared dividend since 2006.

To date the following dividend payments have been announced/made:

DIVIDEND

PAYMENT DATE

AMOUNT

2016 Final Dividend15 September 20168.0
2016 Interim Dividend14 April 20167.75
2015 Final Dividend21 September 20158.0
2015 Interim Dividend15 April 20157.5
2014 Final Dividend15 September 20147.75
2014 Interim Dividend15 April 20147.5
2013 Final Dividend13 September 20137.75
2013 Interim Dividend15 April 20137.25
2012 Final Dividend17 September 20127.5
2012 Interim Dividend16 April 20127.0
2011 Final Dividend19 September 20117.5
2011 Interim Dividend14 April 20116.75
2010 Final Dividend13 September 20107.5
2010 Interim Dividend14 April 20106.5
2009 Final Dividend15 September 20097.25
2009 Interim Dividend14 April 20096.5
2008 Final Dividend18 September 20086.75
2008 Interim Dividend10 April 20086.5
2007 Final Dividend4 September 20076.5
2007 Interim Dividend10 April 20076.5

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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 Companies 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; 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 Entrust (formerly the Auckland Energy Consumer Trust), for such time as Entrust 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 policy:​

  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.