dealtn wrote:Gengulphus wrote:Dod101 wrote:I think from the fact that they tell us they have reviewed and intend to reinstate the dividend at the time of their half year results is a good indication that it is unlikely to be a nil declaration, especially as they are a REIT and have certain distribution obligations as such.
I don't think anyone (including them) can say how likely it is that they'll be in a position to reinstate dividends in November - too much depends on events beyond their control, such as whether we experience a major second wave of COVID-19, whether those who rent properties from them are in a position to pay their rent, etc. The most they can do is look at how they think things will go, project what their financial position will be if things go that way (or reasonably close to it), decide that they anticipate being in a position to pay a dividend if that happens, and base their announced intentions on that.
Or put another way, I think the announcement will be based on a decision that it's highly likely that
either they'll be able to pay an interim dividend
or they'll be able to point to something that's happened and plausibly say "that was unexpected and has forced us to change our intention". How likely each of those two alternatives is, I don't think anyone can judge.
I disagree. They will want to maintain their REIT status, as will the vast majority of other REITs. Given LAND are a long way from being the least able to pay a dividend from their available resources they only won't if the REIT rules and obligations are (temporarily?) altered to allow non-payment. This will most likely only happen through industry wide consultation with the Government and HMRC.
So, if they don't pay, it wouldn't be "forced us to change our intention" but "in line with the REIT industry we are taking advantage of the new (temporary) relaxations of REIT obligations to preserve cash flow..."
Personally I think they will pay the minimum necessary to maintain REIT status, and that REIT rules won't change. But we will have to see.
None of that is disagreeing with me - you're simply suggesting
another way that non-payment of an interim dividend might be justified, one which doesn't necessarily depend on some further major adverse event happening. And I agree that it could plausibly happen that way. However, their
annual results (released on May 12th) said "
While the Group is confident it will continue to satisfy the requirements for REIT status, our discussions with HMRC indicate that they are likely to make allowance for any Covid-19 related breach of these requirements by REITs." That suggests to me that if no such event happens, i.e. things go as they expect/hope, then they'll pay the amount they need to as an interim dividend as the clearest way of maintaining REIT status and so won't need to rely on any allowances being made by HMRC. And if such an event does happen, they'll be able to say "that was unexpected and has forced us to change our intention" and probably
also "fortunately, HMRC are making allowances for this, so that we're not losing REIT status". I.e. I think the possibility you suggest and the possibility I suggest go largely hand in hand, though I'm not ruling out either combination of one happening and the other not.
That still doesn't resolve the question of whether payment of an interim dividend is likely, unlikely, or somewhere inbetween. And I stick to my point that I don't think
anyone is in a position to answer that question at present - November is just too far away and there are far too many major adverse events that might or might not happen before them. I'm not going to agree with your thought that they'll pay the minimum needed to maintain REIT status, neither am I going to disagree with it - I simply have no idea what the outcome will be, and no hope that I will have an idea about it until a lot closer to the time. As you say, we will have to see.
Gengulphus