PDSnet Glossary

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Definition

When a company has surplus cash it can sometimes pay a special dividend over and above its normal interim and final dividends. Companies accused of having a "lazy balance sheet" with excessive surplus cash are under pressure to pay a special dividend. An example of a special dividend is that announced by Grand Parade Investments (GPI) on 11th November 2021. GPI had sold its interest in Burger King in a deal worth R570m. They received R465,4m of that consideration and used R88m to settle debt. The balance was then distributed to shareholders in a special dividend of 88c per share. Of course, the dividend was subject to dividend withholding tax (DWT) and so shareholders actually received 70,4c.

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