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Clothing retailer Matalan Chariman Hargreaves working out dividend figure
03 Jul '06
2 min read
The Board of Matalan PLC announces that Mr John Hargreaves, the Chairman of the Board, has indicated that he is working on a possible offer for the Company. A further announcement will be made regarding any potential offer when appropriate. There can be no certainty that an offer will be made nor as to the terms on which any offer might be made.
At the annual general meeting this year shareholders are being asked to vote in favour of the proposed final dividend of 6p for the year ended February 2006. The Board has now been informed by the Chairman that, in his view “the dividend recommended for 2006 is out of line with the dividend cover maintained by comparable UK quoted retailers”.
The Board was further informed that:
“Whilst the Hargreaves' family will not oppose the dividend recommended for 2006 at the forthcoming Annual General Meeting, you should be aware that in the future, the Hargreaves' family will not support any dividend that does not have an adequate level of cover and wishes Matalan to return to a dividend policy where the dividend is more adequately covered by the profits and cash flows of the business in line with market norms.”
Mr Hargreaves indicated his intention of raising this matter at the annual meeting scheduled for 5th July and hence the Board is bringing it to the attention of shareholders now.
The Board does not agree with this assessment given the cash generation of the business. In the year to February 2006 operating cashflow covered the dividend approximately twice.
At the annual general meeting this year shareholders are being asked to vote in favour of the proposed final dividend of 6p for the year ended February 2006. The Board has now been informed by the Chairman that, in his view “the dividend recommended for 2006 is out of line with the dividend cover maintained by comparable UK quoted retailers”.
The Board was further informed that:
“Whilst the Hargreaves' family will not oppose the dividend recommended for 2006 at the forthcoming Annual General Meeting, you should be aware that in the future, the Hargreaves' family will not support any dividend that does not have an adequate level of cover and wishes Matalan to return to a dividend policy where the dividend is more adequately covered by the profits and cash flows of the business in line with market norms.”
Mr Hargreaves indicated his intention of raising this matter at the annual meeting scheduled for 5th July and hence the Board is bringing it to the attention of shareholders now.
The Board does not agree with this assessment given the cash generation of the business. In the year to February 2006 operating cashflow covered the dividend approximately twice.
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