8. Dividends

The Directors have declared a final dividend of 64.0 cents per share, compared with 63.0 cents per share for the prior final dividend. The annual dividend for the year ended 30 June 2019 was 119.0 cents per share compared with 117.0 cents per share for the prior year. The dividend will be 80% franked and will be paid on 20 September 2019. The record date to determine shareholders’ entitlements to the final dividend is 22 August 2019. Shares will commence trading ex-dividend on 21 August 2019.

The following dividends have been paid or declared by the Directors since 30 June 2018:

Final dividend of 63.0 cents per share
(80% franked) paid on 21 September 2018

$413 million

Interim dividend of 55.0 cents per share
(80% franked) paid on 22 March 2019

$361 million

Final dividend of 64.0 cents per share
(80% franked) payable on 20 September 2019

$420 million

Before declaring each dividend the Directors satisfied themselves that:

  • AGL’s assets exceeded its liabilities immediately before declaring the dividend and the excess was sufficient for the payment of the dividend;
  • the payment of the dividend was fair and reasonable to AGL’s shareholders as a whole; and
  • the payment of the dividend would not materially prejudice AGL’s ability to pay its creditors.

AGL targets a payout ratio of approximately 75% of Underlying Profit after tax and a minimum franking level of 80%.

Pursuant to the AGL 80% franking policy, in recent years AGL has paid the unfranked component of dividends out of certain foreign source income (known as Conduit Foreign Income, or CFI). This is relevant only for non-resident shareholders. The effect is that the unfranked portion of the dividend is not subject to Australian dividend withholding tax. The CFI balance will be fully utilised for the 2019 final dividend, with only a portion of the unfranked component paid out of CFI.

Unfranked dividends sourced from CFI have no tax implications for Australian resident shareholders.

The AGL Dividend Reinvestment Plan (DRP) will operate in respect of the 2019 final dividend. AGL will acquire shares on market and allot them to DRP participants at no discount to the simple average of the daily weighted average price at which AGL’s ordinary shares trade during each of the 10 trading days commencing 26 August 2019. The last date for shareholders to elect to participate in the DRP for the 2019 final dividend is 23 August 2019.

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