On 26 February 2020, the board of directors (“board”) declared an interim dividend in respect of the 2020 financial year of R70.978 million, which equates to 78 cents per share for each of the 90 966 932 shares in issue, subject to the applicable tax levied in terms of the Income Tax Act (Act No. 58 of 1962 amended) (“dividend withholding tax”) of 20% (“the interim 2020 dividend”).

The dividend has been declared from income reserves. The net dividend is 62.4 cents per share for shareholders liable to pay dividend withholding tax. The company’s income tax reference number is 9695015033. The company has 90 966 932 shares in issue at the date of declaration.

The dividend was payable on 6 April 2020 subject to compliance with the JSE Listings Requirements and the South African Companies Act (Act No. 71 of 2008), as amended (“Companies Act”).

Following the outbreak of COVID-19 and the potential impact of long-term trading restrictions on the group’s cash reserves, the board advised shareholders on 30 March 2020 that payment of the interim 2020 dividend would be deferred until 5 October 2020. On 3 September 2020, and in response to reports of a second wave of infections being imminent, the board advised shareholders that payment of the interim 2020 dividend would be further deferred, with a decision on the payment date expected to be announced in March 2021.

Notwithstanding an initial improvement in trading during the second quarter of the period, the second wave of COVID-19 infections, coupled with the government’s reintroduction of a national curfew and restrictions on social activity in December 2020, has again impacted profitability and cash generation in December 2020 through to February 2021.

While the board is confident that trading will continue to improve, there is no guarantee that this will be case.

In terms of the Companies Act, prior to sanctioning the payment of the interim 2020 dividend, the board must consider all reasonably foreseeable financial circumstances of the company at the time and for a period of 12 months immediately after payment of the interim 2020 dividend. The board believes that it is a reasonably foreseeable possible event that more stringent trading restrictions could be re-imposed if the COVID-19 infection rate increases, which could have a further negative impact on the business of the group. Similarly, should the current restrictions be extended over the long term, the current projected recovery will be delayed. Based on an assessment of the most likely projected cash flows and currently available information, the board is confident that the group’s current cash reserves will be sufficient for the foreseeable future. The board has considered several alternative scenarios which are reasonably possible and projected cash flows for these scenarios. The payment of the interim 2020 dividend would significantly reduce the group’s available cash reserves and would result in a cash deficit should certain of the scenarios projected occur.

Accordingly, in compliance with the Companies Act, as well as the fiduciary responsibilities of its directors, the board determined it appropriate to defer the payment of the interim 2020 dividend until future cash flows can be predicted with a greater confidence level and will reassess the financial circumstances of the group ahead of the publication of its results for the year ending 30 June 2021, which are expected to be released in September 2021. A further announcement will be made at that time regarding the interim 2020 dividend.