Oops: Next has infringed the Companies Act (but don't worry, your dividends are safe)

Catherine Neilan
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Oops... but don't worry, you won't have to give back your dividend

Next has had to issue a circular this morning, admitting to a "procedural oversight" which has resulted in a "technical infringement" of the Companies Act.

The incident relates to payments of special interim dividends from 3 February 2014, 2 February 2015 and 2 November 2015 and an ordinary interim dividend paid on 2 January 2015.

Next said: "While the company always had sufficient reserves to pay the relevant distributions at the time that they were made, the Act required this to be demonstrated by reference to interim accounts filed at Companies House prior to payment.

"Regrettably, those interim accounts were not filed with Companies House until after the relevant distributions had been paid and after the lapse had been identified."

Shareholders are now being notified of the error and a general meeting is being called to put forward a resolution "which will, if passed, address the situation and put all parties back in the position they were intended to be had the full technical requirements of the Act been complied with at the time".

The good news for shareholders is that Next will not have to restate any past accounts and no dividends are expected to be repaid.

Similarly, it will have no impact on Next's financial outlook, or its ability to continue buying back shares or offering future dividends. No fines or other penalties are being incurred.

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