Media company NZME has put its $30 million share buyback on hold and instead plans a five cents a share special dividend to return spare cash to shareholders.
Photo: RNZ/ Brad White
The company, which owns the New Zealand Herald newspaper and radio networks including Newstalk ZB, said since the buyback started in February it had bought just under 18 percent of its target, worth about $5.2m, but the pace was slower than expected.
A direct cash return to shareholders was regarded as a better way to return surplus cash.
However, the company said the special payout might cause the company to exceed its dividend policy, which is to payout between 30 and 50 percent of its free cashflow.
"The rationale for paying a dividend otherwise than in accordance with its dividend policy is that this special dividend will provide a return of capital to shareholders given the slower than anticipated progress of the buyback programme," NZME said in a statement to the NZX.
The special dividend would cost the company about $9.7m, which would be added to the amount already spent on the buyback, bringing the total capital return to about $15m.
NZME said when the share buyback resumed it would changed accordingly to ensure that the total capital returned remained at $30m.