NZX to split shares, change dividend policy

The NZX is splitting its shares four ways, and changing its dividend policy. Photo / Mark Mitchell.

NZX Ltd, one of the best performers on its own exchange this year, plans to quadruple its shares on issue through a split and base its dividend policy on operating earnings rather than net profit.

The share split, set to occur after the close of trading on December 21, will increase the number of shares on issue to 123 million from 30.7 million, NZX said in a statement.

The split "reflects a desire by the NZX board to bring the share price into line with the average NZX50 share prices" and follows calls from NZX retail shareholders, it said.

The stock exchange operator has expanded and transformed itself since listing in 2003, diversifying its businesses to reduce reliance on listing fees, and expanding into agricultural and energy data and media.

As a result of the changes, it is "no longer appropriate" to base dividend payments on 60 per cent of net income "given the non-cash financial asset changes in valuation" impacting on profit, it said.

Instead, NZX will switch to basing payments to shareholders on operating earnings and announcing dividends as cents per share.

On that basis, the final dividend for 2009, post the split, will be 6.5 cents, amounting to 60 per cent of expected operating earnings, it said. Dividends will continue to be fully imputed.

Shares of NZX climbed 1.4 per cent to $8.01 today and have gained about 45 per cent this year, outpacing the NZX50's 15 per cent advance.