Traminer plc provides software solutions for the airline industry. At present, shares in the business are held by the senior managers and by a venture capital business. However, Traminer plc intends to seek a Stock Exchange listing and to make 75 per cent of the ordinary shares available to the investing public. The board of directors recently met to decide upon a dividend policy for the business once it has become listed. However, the meeting ended without agreement.

Information relating to the business over the past five years is set out below:

Required:

Evaluate the dividend policy pursued by Traminer plc over the past five years and discuss whether any changes to this policy are required.

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Year ended 30 April 2015 2016 2017 2018 2019 Ordinary shares in issue 000 500 500 800 1,000 1,000 Profit for the year £000 840 1,190 1,420 1,940 2,560 Ordinary share dividends £000 420 580 340 450 970