CAP Shareholders Commend Board, Approve Dividend | Independent Newspapers Limited
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Business, Money Market

CAP Shareholders Commend Board, Approve Dividend

Posted: Jun 24, 2015 at 12:50 am   /   by   /   comments (0)

By Bamidele Ogunwusi  –  Lagos

Shareholders of CAP Plc, a subsidiary of UAC of Nigeria PLC and manufacturer of Dulux, a leading global paint brand, applauded the board and management of the company for leading the company’s path to profitability. This is as they approved a dividend of N1.645 billion, representing an interim dividend of 150 kobo and final dividend of 85 kobo per ordinary share of 50 kobo each.

A shareholder activist, Adebayo Adeleke, while applauding the dividend at the 2014 Annual General Meeting in Lagos, urged the company to imbibe a dividend policy where a certain portion of the company’s profit is retained by the company and plough back into the system.

His words: “We are extremely happy with you and we cannot hide it. You are doing well amidst competition in a sector that is not regulated.Over the years, innovations and quality have distinguished the company from others, but the company needs to imbibe a dividend policy where an agreed percentage of the profit is paid as dividend. What the company is paying this year is on the high side compared to what the company made as profit”.

The company posted a profit before tax of N2.44 billion in 2014, an increase of 17 percent over the previous year, while profit after tax rose from N1.416 billion in 2013 to N1.662 billion as turnover rose to N6.99 billion, a growth of 13 percent during the same period.

Addressing the company’s shareholders at the meeting, the Chairman of the Company, Mr. Larry Ettah said: “Based on this performance, the Board has recommended a final dividend of N595 million, representing 85 kobo for every 50 kobo of ordinary share to shareholders on the register of members at the close of business on May 28th 2015 for your consideration and approval.

“This is in addition to the interim dividend of 150 kobo per share paid on November 19, 2014.  This brings the total Dividend for 2014 financial year to N1.645 billion, representing 235 kobo per share.”

The proposal received an overwhelming approval during the meeting.

Commenting on the operational environment, Ettah noted that businesses have continued to be buffeted by the usual challenges of poor infrastructure and public services, insecurity, official corruption, multiple taxes, power supply shortfalls and volatile capital market.

He explained that power supply declined so precipitously in the country that public power became non-existent just as the currency devaluation heralded another round of sharp increases in the prices of Inputs.

He stressed that coupled with the elevated political risk due to the elections recently held in the country, investment dried up as consumer purchasing power remained weak. He stated that the effects of these developments on the economy were low corporate revenues and margins and higher cost of doing business.

The Chairman said about CAP PLC’s plan for the future, stressing: “As a forward looking business, we will continue to seek and harness opportunities that ensure we remain relevant and create more value for you, our esteemed shareholders and other stakeholders.  We will invest in cutting edge technology for paint manufacture that will enable your company to efficiently meet the needs of consumers, allowing them to express their colour preferences in the local variant of our flagship brand.”

Reviewing the activities in the operating environment in 2014, Mr Ettah said: “The year 2014 witnessed a growth of 6.23 percent in GDP which was aided by increased output in sectors of Agriculture, Hotels and Restaurants, Building and Construction and Telecommunications of the economy (global GDP growth rate was three percent while Sub-Saharan Africa GDP growth rate was 5.1 percent). The country’s external reserve position fell in the year 2014 from $43.61bn at 2013 year-end to $35.2bn, equivalent to six months cover of import disbursement.