Nuplex dividends face tax hit

Nuplex shareholders will have to pay tax on their dividends next year, they heard at yesterday's annual meeting in Auckland.

The company's next interim dividend will be the last for which 100 per cent imputation credits are available.

Chairman Fred Holland said with high levels of the company's profits paid out as dividend, it was inevitable reserves of imputation credits from tax paid in New Zealand - where the company earns 20 per cent of its net profit - would eventually be exhausted.

Australian-based shareholders, however, would continue to enjoy full imputation for the foreseeable future.

"While I am sure this is disappointing to many of you, it is worth remembering dividends for New Zealand shareholders, and the fundamental value of our shares, have been and will remain much higher than if we had stayed limited to the New Zealand market."

Despite the high tax burden on companies with offshore operations, the board was committed to Nuplex remaining a New Zealand-listed company.

"We will, however, maintain a watching brief on all opportunities that could provide an advantage to existing shareholders," he said.

Nuplex is Australasia's largest producer of resins - which account for 77 per cent of the company's total sales.

Nuplex shares jumped 12c to close at $4.14 yesterday, having ranged between $3.39 and $6.20 in the last year.