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STENPROP LIMITED - STP : Finalisation announcement in respect of an election to receive either a cash dividend or a scrip dividend

2020/01/14 09:00:41

Stock report
                    
STP : Finalisation announcement in respect of an election to receive either a cash dividend or a scrip dividend: 
STENPROP LIMITED
(Registered in Guernsey)
(Registration number 64865)
LSE share code: STP JSE share code: STP
ISIN: GG00BFWMR296
('Stenprop' or the 'Company')


FINALISATION ANNOUNCEMENT IN RESPECT OF AN ELECTION TO RECEIVE EITHER A CASH DIVIDEND OR A SCRIP DIVIDEND


14 January 2020

Stenprop shareholders are referred to the circular (the 'circular') and the announcement issued on Thursday,
19 December 2019 in respect of an election to receive the interim dividend of 3.375 pence per share (the 'dividend')
for the six months ended 30 September 2019, either as a cash dividend (the 'cash dividend') or as a scrip dividend (the
'scrip dividend'). Shareholders are now advised that the dividend will be paid as follows:

    -   1.710 pence (50.67%) will comprise a property income distribution ('PID'). The PID will be subject to a deduction
        of a 20% United Kingdom ('UK') withholding tax unless exemptions apply.
    -   1.665 pence (49.33%) will comprise a non-PID. The non-PID will be treated as an ordinary UK company dividend,
        with no UK withholding tax deducted.

(i) Shareholders receiving the dividend in cash:

South African ('SA') shareholders are advised that the exchange rate for the dividend will be 18.6646 ZAR to 1.00 GBP
(the 'exchange rate'), as obtained by the Company on Monday, 13 January 2020, resulting in a gross local dividend
amount of 62.99301 ZAR cents per share. Accordingly, shareholders who do not elect to receive new ordinary shares
pursuant to the scrip dividend will be paid a cash dividend per share as follows:

                                                                                        UK Shareholders                 SA Shareholders

  PID                                                                                       (GBP pence)                     (ZAR cents)

  Gross amount of PID                                                                           1.71000                        31.91646

  Less 20% UK withholding tax *                                                                 0.34200                         6.38329

  Net PID dividend payable**                                                                    1.36800                        25.53317

  Less effective 5% SA dividends tax for SA Shareholders***                                         n/a                         1.59582

  Net PID dividend payable***                                                                       n/a                        23.93735

 * Certain categories of UK shareholders may apply for exemption, in which case the PID element will be paid gross of UK withholding tax.
 ** Net position after deducting UK withholding tax for both UK and SA Shareholders, but before SA shareholders have claimed back 5% from
 HMRC under the double tax agreement between the United Kingdom and South Africa in respect of the UK withholding tax.
 *** SA dividends tax applies to SA Shareholders who do not qualify for an exemption from SA dividends tax (SA tax resident companies and certain
 exempt institutions are, amongst others, exempt from SA dividends tax) at the rate of 20%, reduced by the UK withholding taxes suffered, which
 cannot be recovered from the UK (which is effectively 15%, after taking into account the 5% refund which may be obtained from the UK).
                                                                                     
                                                                                        UK Shareholders                 SA Shareholders

  Non-PID*                                                                                  (GBP pence)                     (ZAR cents)

  Non-PID element                                                                               1.66500                        31.07655

  Less 20% SA dividends tax for SA Shareholders**                                                   n/a                         6.21531

  Net Non-PID dividend payable                                                                  1.66500                        24.86124

 * Non-PID - taxed as a normal dividend for UK purposes, i.e. no UK withholding tax applicable.
 ** Certain categories of SA shareholders are exempt from SA dividends tax, e.g. SA resident companies.

(ii) Shareholders who elect to take shares:

The scrip dividend reference price for UK shareholders is 127.1264 pence ('scrip dividend reference price'), being the
average closing price of Stenprop shares traded on the London Stock Exchange ('LSE') over a period of five days as at
Friday, 10 January 2020, less the dividend. The scrip dividend reference price for SA shareholders is 23.72763 ZAR, being
the scrip dividend reference price for UK shareholders, converted to Rand at the exchange rate.

The number of new ordinary shares to be allocated to shareholders electing to participate in the scrip dividend will be
calculated by dividing the net value of the dividend otherwise receivable by a shareholder by the scrip dividend reference
price and rounding down to the nearest whole number. As no fraction of a new share will be issued, any entitlement
which results in a fractional share will be rounded down to the nearest whole number, with a cash payment to be made
to the relevant shareholder in respect of the fraction ('cash payment').

In the case of shareholders on the SA register, such fractions of shares will be sold in the market on behalf of the
shareholders entitled to the fractions of shares and the cash payment in respect of the fractions will be paid to those
shareholders. The cash payment is calculated by multiplying the fractional entitlement by the scrip dividend reference
price. Shareholders are only entitled to the proceeds for their fractional entitlements, which are sold on their behalf,
equal to the amount of the cash payment.

The cash payment will be made on the payment date, being Friday 14 February 2020.

By way of illustration, a shareholder who holds 1,000 shares, and who elects to receive new ordinary shares pursuant
to the scrip dividend, will receive a number of new ordinary shares calculated as follows:

                                                                                         UK Shareholders                SA Shareholders

  In respect of the PID                                                                          (GBP P)                          (ZAR)

  PID dividend net of UK withholding tax entitled to receive*
  (As per (i) above x 1,000):                                                                  P13.68000                  255.33173 ZAR
  Scrip dividend reference price                                                                P1.27126                   23.72756 ZAR
  Calculated number of new shares to which shareholder is
  entitled                                                                                      10.76098                       10.76098
  Actual number of new shares received                                                                10                             10
  Gross Cash Balance (multiply fractional entitlement by scrip
  dividend reference price)                                                                     P0.96740                   18.05613 ZAR

 * A scrip dividend is not subject to SA dividends tax, therefore no SA dividends tax is deducted for SA Shareholders in this instance, only UK
 withholding tax. SA shareholders may claim back 5% from HMRC under the double tax agreement between the United Kingdom and South Africa
 in respect of the UK withholding tax
                                                                                         UK Shareholders                SA Shareholders

  In respect of the non-PID element                                                              (GBP P)                          (ZAR)

  Gross amount of non-PID dividend entitled to receive
  (Gross Non-PID per (i) above x 1,000):                                                       P16.65000                  310.76559 ZAR
  Scrip dividend reference price                                                                P1.27126                   23.72756 ZAR
  Calculated number of new shares to which shareholder is                                       13.09724                       13.09724
  entitled
  Actual number of new shares received                                                                13                             13
  Gross cash payment (multiply fractional entitlement by scrip
  dividend reference price)                                                                     P0.12362                    2.30727 ZAR

TIMETABLE

The salient dates and times announced on Thursday, 19 December 2019 remain unchanged.

TAX IMPLICATIONS

The receipt of the cash dividend or electing to receive the scrip dividend may have tax implications for shareholders.

With regards to shareholders on the SA register, the scrip dividend (including the cash payment relating to fractions of
shares) does not constitute a 'foreign dividend' as defined in section 1(1) of the South African Income Tax Act 58 of
1962 ('ITA') and accordingly does not give rise to any dividends tax. However, the shares issued in terms of the scrip
dividend are deemed to be acquired at a base cost or tax cost of nil in terms of section 40C of the ITA. As the cash
payment relating to fractions of shares arises pursuant to the disposal of shares on behalf of shareholders, such cash
payment must be disclosed by South African shareholders in their tax returns as proceeds for capital gains tax purposes,
or gross income, (depending on whether the shareholder holds his/her shares on income or capital account) in relation
to the disposal of shares which have no base cost or tax cost.

Shareholders are also referred to the general summary of certain limited aspects of the taxation treatment of
distributions paid by the Company for SA resident shareholders and UK resident shareholders included in paragraph 6
of the circular. Shareholders are advised to obtain appropriate advice from their professional advisors regarding the tax
consequences of the cash dividend, scrip dividend and cash payment.


For further information:

Stenprop Limited                                                         +44(0)20 3918 6600
Paul Arenson
James Beaumont
Julian Carey

Numis Securities Limited (Financial Adviser)                             +44(0)20 7260 1000
Hugh Jonathan
Vicki Paine

Java Capital                                                             +27(0)11 722 3050
(JSE Sponsor)
About Stenprop:

Stenprop is a Guernsey-registered UK REIT. The objective of the Company is to deliver sustainable growing income to its
investors. Stenprop's investment policy is to invest in a diversified portfolio of UK multi-let industrial (MLI) properties
with the strategic goal of becoming the leading MLI business in the UK. For further information, go to
www.stenprop.com.

Date: 14-01-2020 09:00:00
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