Payout on foreign shares

METHODOLOGY: HOW DIVIDENDS ARE DETERMINED FOR THOSE HELD IN VARIOUS COUNTRIES

- Gareth Collier

The question: If a financial instrument is held across multiple countries, how is the dividend payout determined? For example, Pan African Resources has a final dividend of 0.95611 GBPp. If I hold 1,000 shares, what would the payout be before taxes?

The answer: When investing in international shares, understanding how dividend payouts are calculated can be complex—particularly when companies are listed on multiple exchanges or declare dividends in foreign currencies.

Let's unpack using Pan African Resources as our case study, and then broaden the discussion to cover key considerations when receiving dividends from foreign-listed companies.

1. What does a dividend of 0.95611 GBPp mean?

Pan African Resources is listed on multiple exchanges, including the Johannesburg Stock Exchange (JSE), London Stock Exchange (LSE) and New York Stock Exchange (NYSE).

The company published a final dividend of 0.95611 pence per share (GBPp) on 11 September 2024. Small "p" indicates the dividend is in pence, not pounds.

What complicates this case is that Pan African Resources has various reporting and functional currencies. Management, in fact, proposed a final dividend of 22 ZARc and converted this to 0.95611 GBPp per share using a rate of GBP/ZAR: 23.01 for "illustrative purposes".

This is the dividend that some financial websites list, but it was not the final amount.