New approach puts unclaimed dividends and shares to good use
· Rentokil Initial Cares good causes fund established
· Unclaimed dividends and untraceable shares available to companies after 12 years
· £500m – £1bn estimated to be available across FTSE100
Rentokil Initial plc (FTSE: RTO) (“the Company”) today announces that it is taking a lead in a new initiative to use unclaimed shareholder dividends and unclaimed shares to fund charitable causes. A new fund, named Rentokil Initial Cares, will be established.
According to data published in Link Asset Services' UK Dividend Monitor, the total value of dividends paid by UK companies was £32.3bn in the third quarter of 2018 with the total amount paid by UK companies for the full year (including both regular and special dividends) on track to reach £100bn.
While the vast majority of dividends are claimed by shareholders, each year a small percentage (but potentially significant in cash terms) of dividends remain unclaimed and a small number of shareholders are untraceable. In line with UK company law, these “dormant” funds can be returned to companies after twelve years.
At Rentokil Initial, the total value of unclaimed dividends and shares stands at over £1m.
Andy Ransom, Chief Executive of Rentokil Initial plc, said:
“After trying our best to contact the relevant shareholders, we will now use the value of any unclaimed shares and unclaimed dividends to support good causes. But imagine this kind of impact multiplied a hundred times over – it could make a huge difference and I hope other companies will join us.
“Our new good causes fund – Rentokil Initial Cares – will support our colleagues' own charitable efforts around the globe and good causes in line with our mission to Protect People and Enhance Lives. I would expect us to commit around £250,000 to good causes each year.”
Frank Field MP & co-founder of Cool Earth
“Using unclaimed dividends to address climate change is a beautifully simple idea and it is typical that Rentokil Initial thought of it first. A smart company, who are showing great leadership to deliver a global impact.
“Cool Earth and its community partners are on the front line of the fight against rainforest destruction, which must be a priority if we're to prevent cataclysmic climate change.
“Thanks to Rentokil's ingenuity, the funding from unclaimed dividends will ensure some of the world's most endangered forest are kept standing. I hope that where Rentokil leads other responsible companies will follow.”
Background
What if a shareholder claims their dividends after 12 years?
· If a legitimate claim up to a value of £3,500 (the size of the average holding at Rentokil Initial) is made after the 12-year cut-off point, we will continue to honour the claim and pay the dividends to the shareholder, even if we have used the funds for RI Cares by then.
What is the 12 year rule?
· While the Limitation Act 1980 provides that the time limit is generally six years, the sample model articles of association under the Companies Act 2006 states a 12-year period and most companies allow for 12 years. It is possible to reduce the period for unclaimed dividends (but not shares) down to six years by amending a company's articles of association, which Rentokil Initial has done.
What charities are supported by Rentokil Initial?
· Every year the company support many charities around the world. The focus for this new fund will be those which help to protect people and enhance lives.
· Rentokil Initial has been working with Malaria No More UK (MNM) since 2011, which has the aim of wiping out this terrible pest-borne disease. Together with monies raised by colleagues through sponsored runs, bike rides and parachute jumps over £200,000 has been raised. According to MNM, it costs just £1 to save a life.
· Rentokil Initial also supports the rainforest conservation charity Cool Earthin its vital work of protecting the rainforest environment. In 2018, the Company protected c. 1,000 acres of rainforest in Papua New Guinea and in doing so preventing the release of carbon through deforestation to the equivalent of its 2017 emissions. Cool Earth's approach sets up local community-led partnerships, which help villages on the frontline of rainforest destruction to build sustainable livelihoods.
· Better Futures is Rentokil Initial's own community health education programme – providing hygiene training to children and adults in the poorest communities in Asia. More than 20,000 people have benefited since the launch of this public health initiative in 2013.