Dehring, Bunting and Golding (DB&G) will pay 38 per cent of its net profit for the year ended March 31 to shareholders in July, the highest percentage payout on record.

SCHNOOR. higher dividend payment does not represent a further change in policy

The higher dividend payment, however, does not represent a further change in policy, according to Anya Schnoor, chief executive of the investment house, and is "the exact amount as last year", although higher in aggregate.

The 86 cents share dividend, which DB&G's board last week decided to pay shareholders "on record as at close of business on June 13 and that the same be paid on July 5, 2007", is equal to the two payments - one in December and the other in June last year - made on profit earned during the year to March 31, 2006.
But DB&G had actually changed its dividend policy twice since 2005 and before the sale of the company to Canadian commercial bank, Bank of Nova Scotia (BNS), and its Jamaican subsidiary late last year.

First, in October 2005, the board decided to pay dividends twice per year and made an interim payment of 15 cents per stock unit in December.
Then last April, the board, in reviewing its dividend policy, decided to increase the company's aggregate dividend payment as a percentage of its net profit, which was followed by a 71 cent per share dividend as a second interim payment for the 2006 fiscal year.

Last year's dividend payment, as a percentage of profit, was the highest on record, as payouts prior to 2006 ranged from 20 to 31 cents per share or 10 to 14 per cent of net profit. The 86 cents per share dividend translated into 30 per cent of net earnings.

But a decline in net profit for the year that ran to March 31, 2007 and an increase in issued shares from the abandoned executive share option plan, that gave three executives of the firms approximately 47 million shares, or 15 per cent of the company over five years, led to an increase payout as a percentage of profit to 38 per cent.

Net profit dropped from $882 million made during the 12 months to March 31, 2006 to $703 million earned during last fiscal year, largely due to a reduction in gains on securities trading from $682 million to $350 million. This was because the transfer assets from the held-to-maturity investment category to the available-for-sale in 2006, which translated into a gain of $221.1 million, was not duplicated last fiscal year.

The number of shares in issue climbed by six million last year, largely on account of an executive share option plan, which gave three of DB&G's executive directors - executive chairman Peter Bunting, COO Garry Sinclair, and company secretary Mark Golding - nearly 47 million shares.
The DB&G executive share plan was set up in 2000 through the creation of 1,000 redeemable preference shares for the executive directors.

The number of ordinary shares to be allocated each year to the executive directors is arrived at by dividing 10 per cent of the net profit for that year by the average book value of the company.

Since the ESOP was established, five allotments of shares were made between 2002 and 2006, resulting in the issuing of 46.9 million shares, which make up 14.9 per cent of the DB&G's fully issued and paid up stocks.
The 1,000 special redeemable preference shares were redeemed by the company on November 28, 2006, as part of the sale agreement to BNS.

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