Firms rush dividends to avoid tax

By Chris Hutching

Friday 31st March 2000

Barry Thomas

Queenstown-based Skyline Enterprises has joined the stampede of companies paying out dividends ahead of Treasurer Michael Cullen's envy tax on high earners which comes into effect tomorrow.

Last week Tourism Holdings and The Warehouse announced early dividend payments and more companies were expected to follow suit.

Skyline Enterprises chairman and Queenstown accountant Barry Thomas announced on Wednesday a $2.5 million payout equating to 10c a share fully imputed.

An interim dividend is an unusual move for Skyline which usually reports annually in May to its 650 shareholders.

Skyline is also going ahead with a fully imputed bonus issue of shares on the basis of one for every three held to be issued on March 29 to all shareholders on the registry at 5pm March 24.

The company's performance last year provided a $6.6 million after-tax surplus and a dividend of 28% fully imputed requiring $3.5 million.

Mr Thomas said trading in Skyline's tourist attractions over the recent summer had been good and so had the returns from its Christchurch and Otago casino investments.

Some other companies have been too slow to close off their registers to get in before the tax hike, which is bound to disappoint shareholders who earn over the $60,000 threshold at which Dr Cullen's higher tax takes effect.

Economists predict a short-term effect on consumer spending may become apparent in coming days or weeks.

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