4.08 The stated formula for the interim dividend (40% of the prior year's total) does not match the 2024 interim dividend
UK Company A · a UK-listed medical technology group · Presentation point
In brief
The dividend history says the Board intends the interim dividend to be set by a formula equal to 40% of the previous year's total dividend. The previous year's total was [n] [currency unit], so the formula gives [n] [currency units], but the 2024 interim dividend was [n] [currency units], as it was in every year shown back to 2020. The report does not say that the formula was set aside or why. In 2025 the interim was [n] [currency units], in line with the formula.
The evidence, as filed
Screenshot withheld to protect the company’s identity: Annual Report 2024, page 273; Annual Report 2025, page 294; Annual Report 2024, page 274. Their wording or layout could lead back to the company even with names and figures masked; the evidence list below records what each page shows.
What the report shows, and what the rule requires
| What the annual report shows | What the rule requires |
|---|---|
| What the annual report shows Policy text: interim dividend 'equivalent to 40% [wording masked] table and narrative: 2024 interim [n] [currency unit] against a 2023 total of [n] [currency unit]. | What the rule requires Either an interim of [n] [currency unit] under the stated formula, or policy text that says the formula was not applied while the total dividend was held at [n] [currency unit], and why. |
Why it matters
Readers of the dividend policy are told the interim follows a 40% formula, while the interim actually declared did not follow it and no reason is given. No audited figure is affected.
Exposure
No regulatory consequence is realistic for voluntary policy wording; the point is accuracy of the shareholder information.
Our workings
the dividend history (p.273) says the Board intends the interim dividend to be set by a formula equivalent to 40% [wording masked]. The dividends per share table on the same page shows a total of [n] [currency unit] for each of 2020 to 2024 and an interim of [n] [currency unit] in each year.
40% of [n] is [n] [currency units], so the 2024 interim is [n] [currency units] below the formula (see workings).
in the 2025 report the 2025 interim is [n] [currency units], exactly 40% of the 2024 total of [n].
No audited figure is wrong; the point is that the narrative does not match the figures.
| Item | [currency unit] |
|---|---|
| 2023 total dividend | [n] |
| Formula interim for 2024: [n] x 40% = [n] | [n] |
| 2024 interim actually paid | [n] |
| Difference: [n] - [n] = [n] | [n] |
| 2025 interim under the formula: [n] x 40% = [n]; paid [n] | [n] |
Management’s best defence, and our reply
The Company would say the sentence states an intention, not a commitment, and that the Board keeps discretion over every dividend; with the total dividend held at [n] [currency units] since 2019, it chose to keep the interim at [n] [currency units] so that the split between interim and final stayed the same. It would add that the actual dividends are disclosed in full on the same page, so no reader is misled about what was paid. However, the policy text describes a formula without any qualification, the 2024 interim departs from it, and the report gives no explanation; the 2025 interim of exactly [n] [currency units] shows the formula is still the Board's working rule. The defence explains the choice but not the silence.
The fix
- Add after the formula sentence, for any year it is not applied: 'For 2024 the Board held the interim dividend at [n] [currency unit], rather than applying the formula, because [reason].'
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | The stated policy: the interim is 40% of the previous year's total | Document | Annual Report 2024, page 273 |
| 2 | The dividends table: interim [n] and total [n] [currency units] in every year from 2020 to 2024 | Document | Annual Report 2024, page 273 |
| 3 | The 2024 interim was [n] [currency units] and the total [n] [currency units] | Document | Annual Report 2024, page 274 |
| 4 | In 2025 the interim was [n] [currency units], which is 40% of the 2024 total | Document | Annual Report 2025, page 294 |
Prepared by Pramanex from the company’s published annual reports, without the company’s involvement, to show how an annual report review reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other assurance engagement, and not legal advice. A regulator-style question is a question, not a conclusion.
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