Your guide to TEMIT’s share split

At the Annual General Meeting on 8 July 2021, shareholders voted in favour of a share split which will take place on Monday 26 July 2021.

This Q&A is designed to explain what this is, when it will happen and what it means for you.

Q. What is a share split?

TEMIT’s share split will divide each ordinary share into five new ordinary shares.

This is called a share split and it is one of the many additional shareholder-friendly actions that TEMIT’s investment trust has undertaken.

Understanding the share split

Each shareholder will receive five shares for each one they own. The share price will adjust accordingly which means there will be no change to the total value of any shareholder’s holding as a result.

For illustrative purposes only
Current shareholdingAfter share split
Shareholding:
(Multiplies by 5)
T TTTTT
Price per share:
(Share price divided by 5)
£10 £2
Total value of holding:
(No change)
£100 £100

Q. Why is it happening now?

Ongoing demand for TEMIT shares has increased their value dramatically. The price of the Company’s shares has more than doubled over the last five years, from under £5 per share in March 2016 to over £10 per share as at the end of March 2021.

This is brilliant news for shareholders who have doubled the value of their initial investment over that period, as well as receiving regular dividends.

The Board recognises, however, that at around £10 per share and expected to increase further over time, investors may find it difficult to acquire shares. The impact of the share split will help to makes the shares more accessible to all prospective shareholders, especially monthly savers and those who reinvest their dividends to grow their shareholding.

Q. Will the value of my shareholding change?

No. There will be no change to the value of your holding as a result of the share split. Each shareholder will have five times more shares to compensate for the revaluation of the share price. While the value per share will be a fifth of the previous value, the value of your total shareholding will be unchanged.

Q. Will the share price change?

Yes. Once the share split becomes effective, the value of each individual share will be divided by five, so will begin trading at 20% of the price immediately preceding the share split. The overall value of a holding will not change, as detailed in the question and above table.

Q: When will this happen?

The share split will happen after the London Stock Exchange closes on Friday 23 July 2021 and trading in the shares after the split will start when the London and New Zealand markets open on Monday 26 July 2021.

Q: Is my dividend impacted?

Each share will continue to be entitled to receive a dividend and your right to dividends commensurate with your shareholding remains unchanged. Any future dividend will be adjusted to take into account the higher number of shares in issue following the share split.

Q: Are there any tax implications resulting from the share split?

No. Your total shareholding will be treated as an existing holding, not a new investment. The share split is simply a reorganisation of TEMIT’s share capital and there are no additional tax liabilities as a result of this action.

Q: Does this affect my voting rights?

You will continue to have one vote per share at any general meetings of TEMIT shareholders. This means that after the share split you will have five times as many votes as before, but all other shareholders will as well, so that overall your rights are unaffected.

Q: When will I receive share certificates for the New Ordinary Shares?

Replacement physical share certificates in respect of the new Ordinary Shares are expected to be posted to shareholders no later than Monday 9 August 2021.

Q. I invest through a fund supermarket, do I need to do anything?

No. This will be dealt with by the fund supermarket or investment platform you use. Share splits happen frequently and all platforms and sharedealing services have been notified. As detailed above, there should be no change to the total value of your shareholding as a result of the share split. If you do have any questions about your shareholding, contact your chosen investment platform in the first instance.

Q. I invest through a financial adviser, do I need to do anything?

These adjustments will happen automatically. As detailed above, there should be no change to the total value of your shareholding as a result of the share split. If you do have any questions about your shareholding, contact your financial adviser.

Summary – what this means for you

If you are a shareholder:

  • The share split takes place on 26 July 2021
  • On that date you will have 5 shares for each existing share owned before the split
  • The share split will not impact the overall value of your holding – but you will have 5 times as many shares
  • The price per share will adjust accordingly (be divided by 5). This is because the assets of the company are divided up across more shares
  • Shares will be cheaper to buy
  • It will be easier to reinvest dividends to grow your shareholding
  • Overall voting rights will not be affected
  • There are no tax implications
  • You do not have to take any action and these changes will happen automatically.

If you are considering a new investment in TEMIT

  • TEMIT shares are more affordable
  • Shares will be easier to buy as there will be more shares in issue
  • It will be easier to reinvest dividends to grow your shareholding