The West

Coventry surges on special dividends.
Coventry surges on special dividends.

UPDATE 2.20pm: Shares in Coventry Group surged after the industrial products company gave in to demands for it to return cash to shareholders.

The company said it would pay out 55 cents per share in fully franked special dividends to shareholders over the next 13 months, comprising five lots of 11 cent distributions starting from July 25 with the final payout being made in August next year.

The payouts equate to $21 million.

Coventry said it held franking credits for about 57 cents a share and a further five cents from a majority owned subsidiary.

The company decided to payout the cash having found no suitable significant acquisitions for the $50 million cash pile it amassed in the sale of its auto parts business in 2011.

"Several small acquisitions have been made but we have not so far found a substantial acquisition which had suitable risks and rewards," Coventry said in a statement.

The company also said it might bring forward the final two 11 cent dividend payouts to June next year if Federal tax changes devalued unused franking credits from 30 cents to 28.5 cents.

Disgruntled shareholders had been campaigning for several months for the company to return some of its cash reserves.

Coventry shares were up 35 cents, or 12.5 per cent, to $3.15 at the close.

The West Australian

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