Shares in media and entertainment company HT&E Ltd (ASX: HT1) are going gangbusters today. At the time of writing, the HT&E share price is trading 30.61% higher at $1.92, having earlier reached a high of $1.99.
This comes after the company announced a final resolution to a tax dispute it was embroiled in.
Here's what we know.
What was announced?
HT&E – which stands for Here, There & Everywhere – advised it has reached a binding heads of agreement with the Australian Taxation Office (ATO) to settle a taxation dispute. The news appears to be having a positive impact on the HT&E share price, which has been well in the green all day so far.
The dispute refers to a New Zealand branch of the company from the financial years ended December 2009 to December 2016. It has been running since 2018 when the ATO first commenced proceedings.
Specifically, the matter involved $102.5 million of tax adjustments, $49 million of penalties, and interest payable of $43 million, amounting to a total of $195 million.
Even though the company felt its treatment of the branch matters was in keeping with tax legislation, it felt the settlement of $71 million was "in the best interests of shareholders".
HT&E arrived at the $71 million figure after lengthy consultations with its tax advisors and considers it a fair outcome for the company, per the release.
The release also notes HT&E intends to pay the remaining balance of its settlement using its existing cash reserves.
Importantly, the company advised that its balance sheet remains in a strong position after the settlement.
Furthermore, the resolution of the "historic tax dispute removes the potential liability for a substantial amount of tax, interest, and penalties".
It allows HT&E and its shareholders to look forward with certainty, per the release.
HT&E share price snapshot
HT&E share price has had a difficult year to date, so today's gains are a welcome boost for shareholders. Since January 1, it has posted a return of just 4.8%. However is still up 28% in the last 12 months.
That's a slight step ahead of the benchmark S&P/ASX 200 index (ASX: XJO)'s gain of around 25% over the past year.
