Auckland Airport said today it would return up to $200 million to shareholders and increase ordinary dividends.
AIA said that following completion of a capital structure review announced in February, the company would proceed with a distribution to shareholders comprising a special dividend of 12 cents per share (total $146.7
million) combined with an on-market share buy-back of up to $53 million.
Chairman Wayne Boyd said the payment and share buy-back programme reinforced the company's commitment to increasing sustainable returns to shareholders while ensuring the company maintained a strong balance sheet to fund the capital expenditure and growth initiatives.
The record date for entitlement to the special dividend is July 29 with payment to be made on August 5.
The special dividend will not carry imputation credits and therefore will be subject to tax in the hands of shareholders.
The on-market share buy-back programme will be conducted over a 12-month period, commencing after the release of the annual result on August 25.
The directors have decided to increase the ordinary dividend for the 2005 financial year from 90 per cent of post tax profit to 95 per cent, subject to the approval of the financial results for the year.
The formal dividend policy will remain to pay out 90 per cent of profits.
The distribution to shareholders and increase in the final ordinary dividend will result in the company incurring additional interest costs of approximately $8 million (after tax) in the 2006 financial year.
Chief executive Don Huse said AIA was undertaking a number of significant projects to expand and upgrade the airport's facilities, and this is expected to continue over the next five years and beyond.
The current investments include the pier segregation development and retail precinct at the international terminal, and the on-going runway rehabilitation and widening projects.
Other projects included expansion of the international terminal, renovation of the existing domestic terminal, and commencement of the new northern runway.
AIA will give details of the capital expenditure programme at the result announcement.
Mr Huse said the capital return despite the future capital requirements, demonstrated the company's confidence in the future.
AIA shares closed on a record high of $2.32 yesterday.
- NZPA
