Court-Approved Scheme Unlocks Special Dividend but Raises Future Questions
The Reject Shop Limited has received Federal Court approval for its Scheme, enabling a fully franked special dividend of AUD 0.77 per share payable mid-July.
- Federal Court approved Scheme on 30 June 2025
- Special dividend of AUD 0.77 per share declared
- Dividend fully franked at 30% corporate tax rate
- Record date set for 7 July 2025, payment on 14 July 2025
- Scheme now legally effective following ASIC lodgement
Court Approval Finalises Scheme
The Reject Shop Limited (ASX – TRS) has reached a significant milestone with the Federal Court of Australia granting approval for its Scheme on 30 June 2025. This legal endorsement marks the Scheme as effective, a crucial step that clears the path for the company to proceed with its planned special dividend distribution.
Details of the Special Dividend
Following the court's approval, The Reject Shop announced a fully franked special dividend of AUD 0.77 per ordinary share. The dividend carries a 30% franking credit, reflecting the corporate tax rate, which is a positive signal for investors seeking tax-efficient income. The record date for entitlement is set for 7 July 2025, with the dividend payment scheduled for 14 July 2025. The ex-dividend date will be 4 July 2025, meaning investors purchasing shares after this date will not be eligible for the dividend.
Implications for Shareholders and Market
This special dividend, unrelated to a specific financial period, represents a return of value to shareholders that may reflect the company’s strong cash position or proceeds from the Scheme. The fact that the dividend is fully franked enhances its attractiveness, particularly for Australian investors who can benefit from the franking credits. Market participants will be watching closely to see how this payment influences The Reject Shop’s share price and investor sentiment in the near term.
Regulatory Compliance and Next Steps
The company has complied with all necessary regulatory requirements, including lodging the court orders with the Australian Securities and Investments Commission as mandated by the Corporations Act 2001. This procedural step confirms the Scheme’s legal effectiveness and removes any remaining uncertainty around the dividend payment. Moving forward, analysts will likely update their dividend yield models to incorporate this special distribution, while investors will assess its impact on the company’s overall financial health and strategic outlook.
Bottom Line?
With court approval secured and the special dividend imminent, The Reject Shop’s next moves will be closely scrutinised by investors seeking clarity on future returns.
Questions in the middle?
- What strategic benefits does the Scheme bring beyond the special dividend?
- How will this special dividend affect The Reject Shop’s capital allocation going forward?
- Will the company maintain or increase dividend payouts in subsequent periods?
