Spheria Emerging Companies Limited has announced a fully franked ordinary dividend of AUD 0.035 per share for the quarter ending December 2024, alongside an updated Dividend Reinvestment Plan pricing methodology.
- Ordinary dividend of AUD 0.035 per share, fully franked at 30%
- Dividend payment date set for 12 February 2025
- Dividend Reinvestment Plan (DRP) price set at AUD 2.3643 per share
- DRP shares to be issued at volume weighted average price from 24 to 29 January 2025
- No discount applied to DRP price; default option is cash payment
Dividend Details and Payment Schedule
Spheria Emerging Companies Limited (ASX: SEC) has confirmed an ordinary dividend of AUD 0.035 per fully paid ordinary share for the quarter ending 31 December 2024. This dividend is fully franked at the corporate tax rate of 30%, reflecting the company’s continued commitment to delivering tax-effective returns to shareholders. The record date for entitlement was 22 January 2025, with the dividend scheduled for payment on 12 February 2025.
Dividend Reinvestment Plan Update
Alongside the dividend announcement, SEC has updated the pricing methodology for its Dividend Reinvestment Plan (DRP). Unlike previous announcements, the DRP price will now be calculated based on the volume weighted average price (VWAP) of shares traded between 24 and 29 January 2025. This adjustment follows the observation that the share price exceeded the post-tax net tangible assets (NTA) per share on the ex-dividend date, prompting the company to issue new shares rather than sourcing them from the market.
The DRP price has been set at AUD 2.3643 per share, with no discount applied, maintaining a neutral stance on shareholder dilution. Shareholders who elect to participate in the DRP will receive new shares issued at this VWAP, while those who do not opt in will receive their dividend in cash by default. The deadline for DRP election notices was 23 January 2025.
Implications for Investors
This update signals SEC’s strategic approach to balancing shareholder returns with capital management. The fully franked dividend underscores the company’s profitability and tax efficiency, which is particularly attractive in the current low-yield environment. Meanwhile, the DRP’s pricing methodology adjustment aims to reflect market realities more accurately and preserve shareholder value by avoiding potential share price distortions.
Investors should note that the DRP shares will not be sourced from existing holdings but will be newly issued, which could have a modest dilutive effect. However, the absence of a discount and the use of VWAP for pricing suggest a fair and transparent approach. This move may also encourage reinvestment from shareholders confident in SEC’s growth prospects.
Looking Ahead
As SEC continues to navigate the evolving investment landscape, the company’s dividend policy and DRP adjustments will be key areas to watch. The forthcoming payment and share issuance on 12 February 2025 will provide a clearer picture of shareholder uptake and market reception. Analysts and investors alike will be keen to assess how these developments influence SEC’s share price performance and capital structure in the near term.
Bottom Line?
SEC’s updated dividend and DRP approach balances shareholder returns with prudent capital management, setting the stage for investor scrutiny at the next payment date.
Questions in the middle?
- How will shareholder participation in the DRP impact SEC’s share price and capital structure?
- Will the fully franked dividend policy continue amid changing market conditions?
- What are the longer-term implications of issuing new shares for the DRP on shareholder dilution?