The Board has completed a review of the dividend policy and has revised the policy to ensure that the dividends are sustainable and paid out of underlying earnings. SingPost's dividends in the past had been largely supported by the domestic mail business, which continues to see declining volumes.
To provide future sources of earnings, significant transformational investments have been made in eCommerce, eCommerce logistics and in the redevelopment of SPC retail mall. In the short term, however, these investments will impact earnings. We have raised capital and taken on debt to fund these investments. The need to review the dividend policy should be understood in this context.
The dividend policy has been changed from an absolute amount to one based on a payout ratio ranging from 60% to 80% of underlying net profit for each financial year, paid quarterly. The Board's objective is to grow the underlying earnings and dividends over time.
In relation to financial year ended 31 March 2017, the Board of Directors has proposed a final dividend of 0.50 cent per ordinary share (tax exempt one-tier). The final dividend, if approved by shareholders of the Company at the Annual General Meeting (“AGM”), will be paid on 10 August 2017. Including the proposed final dividend, total dividend for the financial year would 3.5 cents, which represents a payout ratio of 66% of underlying net profit. The transfer book and register of members of the Company will be closed on 28 July 2017 for the preparation of dividend warrants. Duly completed registrable transfers of the ordinary shares in the capital of the Company received by the Company’s registrar up to 5.00 pm on 27 July 2017 will be registered to determine members’ entitlements to the dividend.
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