Fleetwood fixes dividend policy gap

Fleetwood Corporation has adopted a new constitution that will make it easier for it to pay dividends, after pressure was applied by an activist shareholder group earlier this year.

The new constitution will allow the caravan and donga manufacturer to pay dividends to shareholders in the absence of retained earnings, with managing director Brad Denison stating in the company’s recent half-year report that the directors plan to resume dividend payments as "soon as practical".

The change followed calls in May by an activist shareholder group comprising Sandon Capital and Mercantile Investment Company, which together hold a 6.4 per cent stake in Fleetwood, to make amendments to the constitution that they argued was outdated.

At the time, the activist groups submitted a formal request that an extraordinary meeting to amend Fleetwood’s constitution be held (today), to allow for changes to the Corporations Act in 2010 to be incorporated.

Fleetwood directors then voted in June to decide on changes to the constitution at today’s meeting. However, they said stated they had already planned to make changes to the constitution before the activist shareholder group petitioned for the amendments.

Fleetwood shares were 1.4 per cent lower to $2.70 each at the close.