6% Convertible Cumulative Preference Shares
As we are only too aware the coronavirus epidemic has been a human tragedy and a financial catastrophe for many families and businesses throughout the country and further afield. Professional spectator sports have been one of the worst effected sectors and many leagues and sports clubs are experiencing severe financial difficulties as a consequence.
The SPFL is one of the worst affected leagues and although Celtic is in a strong financial position that advantage will quickly erode without the ongoing financial support of its directors, management, players, supporters and shareholders. The directors and staff have agreed to take salary cuts and deferments and supporters are being asked to buy season tickets for matches they will not be able to attend but shareholders have not been asked to contribute to the cause as yet.
The club has circa 15.8 million of 6% Convertible Cumulative Preference shares in issue and which are owned by around 7,800 individuals including the club’s largest shareholder, Dermot Desmond. These shares pay an annual dividend of 3.6 pence per share. The next dividend is due to be paid in late August to shareholders on the register at end June. The total amount of dividend involved is around £500,000. If shareholders agreed to forego their dividend this would represent a significant saving for the club in these difficult times.
Shareholders can waive their dividend by completing a deed of waiver which can be supplied by the club or by a third party. Also, last year the club was able to reclaim £70,000 of shareholder dividends from supporters who had died, failed to notify the club of a change of address or who had simply failed to cash the cheque.
Also, if a shareholder does not wish to receive the dividend they can elect to receive their dividend in additional shares which would also result in a direct cashflow benefit to the club. Currently, only around 7% of the total dividend is paid.
In conclusion, Preference shareholders wishing to contribute to helping Celtic through this crisis they should consider waiving their dividend or electing to receive shares.
Shareholders who want to receive their dividend in shares instead of cash can find the election form HERE.
The form should be printed, completed and posted to Computershare Investor Services. You will need your Shareholder Reference Number which will be in your share certificate.
PLEASE NOTE THE CELTIC TRUST CANNOT OFFER ANY INVESTMENT ADVICE. IF YOU NEED ADVICE YOU SHOULD SPEAK TO AN AUTHORISED FINANCIAL ADVISOR.