The board of retailer Next has been forced to call a general shareholder meeting next month after finding a technical infringement of the Companies Act 2006  in respect of the payment of the dividends.

The issue relates to the dividends paid in February 2014 and three dividend payouts in 2015. The company said it always had sufficient reserves to pay the dividends at the time that they were made, but the Companies Act requires this to be demonstrated by reference to interim accounts filed at Companies House prior to payment. However, the interim accounts were not filed with Companies House until after the dividends had been paid and after the lapse had been identified.  Next said it had not incurred any fines or other penalties for the breach of the Act.

Next said the matter was of an “historic nature and there is no change to the financial outlook of the Company as a consequence of this technical matter. It also has no impact on the Company’s intentions or ability to continue returning its surplus cash flow to shareholders via future Special Dividends or Share Buybacks. The Company’s past accounts will not need to be restated and no dividends are expected to be repaid.”

The company will propose a single resolution at the general meeting on 10th February 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 dividends were paid.

Manifest’s analysis of this meeting notes that the directors and the former directors have undertaken to abstain, and to take all reasonable steps to ensure that their associates abstain, from voting on the resolution, following advice from  UBS, in its capacity as the Company’s sponsor.

Next is not the only company to have fallen foul of this requirement. In the past year we have identified 10 companies who have had to take remedial action.

Name	Event	Date	Index (@ time)	Accounts not Lodged	Vote in favour at GM
Next plc	GM	10 Feb 2016	FTSE 100	Interim	TBC
Castle Street Investments Trust plc	GM	20 Jan 2016	FTSE AIM	–	Passed
Poundland Group plc	AGM	17 Sept 2015	FTSE 250	Interim	99.99%
SSE plc	AGM	23 July 2015	FTSE 100	Interim	99.85%
Central Asia Metals plc	AGM	17 June 2015	FTSE AIM 100	Interim	Passed
Foxtons Group plc	AGM	7 May 2015	FTSE 250	Interim	100%
STV Group plc	AGM	30 Apr 2015	FTSE SmallCap	Interim	100%
Al Noor Hospitals plc	AGM	29 Apr 2015	FTSE 250	Interim	100%
Wm Morrison Supermarkets plc	GM	6 Mar 2015	FTSE 100	Interim	99.7%
Treatt plc	AGM	30 Jan 2015	FTSE Fledgling	Interim	99.82%
Source: Manifest Information Services Ltd

Manifest has passed its findings with ICSA, the Institute of Chartered Secretaries & Administrators.

Last Updated: 24 January 2016