Fletcher Building seeks to maintain dividends through economic cycles and to progressively grow the dividend over the medium term. The target dividend pay-out ratio, in the range of 50% to 75% of net earnings before significant items, is intended to provide sufficient flexibility for dividends to be maintained despite variations in economic conditions. Maintenance of a dividend in this range will be subject to there being no material adverse change in circumstances or outlook. In determining a dividend for any year, a number of factors are taken into consideration, including current and forecast earnings and operating cash flows, capital requirements and the company's debt equity position.
Beyond dividends, Fletcher Building will consider other means of distribution, should cash flows and future investment requirements allow.
Fletcher Building's policy on franking and imputation is to fully impute both the interim and final dividend with New Zealand tax credits each year (or to the maximum extent possible) and fully frank the final dividend with Australian tax credits where possible.
Notwithstanding the dividend policies above, and subject to the limitation on dividends in respect of Fletcher Building shares, the board of directors of Fletcher Building has an absolute discretion to change its intentions, to increase or reduce dividends, or to not authorise any dividends at all on Fletcher Building shares.
Fletcher Building can give no assurance about the level of dividends, if any, or the level of tax credits attached to dividends.