Shareholders of Nigeria Bottling Company Plc (NBC), yesterday received and approved the company\'s financials for the financial year ended December 31, 2005, and the directors\' proposition that some shareholders convert their dividend into additional shares on the Stock Exchange.
By the results prosecuted to shareholders at the yearly general meeting held in Lagos yesterday, the company\'s after tax profit and minority interest fell by 24 per cent from N3.02 billion in 2004 to N2.31 billion in 2005, over a turnover which rose by 17 per cent from N47.6 billion to N55.44 billion.
Taxation on profit on ordinary activities, however, rose by 319 per cent from N298.3 million to N1.25 billion, but dividend fell by 50 per cent from N1.559 billion to N779.6 million, and retained profit rose marginally by five per cent from N1.5 billion to N1.534 billion.
Earnings per share fell by 24 per cent from 233 kobo to 178 kobo, while dividend per share fell from 120 kobo to 60 kobo. West assets per share rose by eight per cent from 1,319 kobo to 1,428 kobo.
Before approving the dividend yesterday, the board proposed a scrip dividend option for the shareholders, which was approved, but it is subject to the approval of the regulatory authorities.
Under special business, the directors proposed: \"That subject to the approval of the appropriate authorities, the directors be authorised to offer to all members on the company\'s register as at the close of business on April 28, 2006, ordinary shares of 50 kobo each of the company at the ruling price of the company\'s shares on the Nigerian Stock Exchange on the date of the yearly general meetings, and that such shares be allotted and credited as fully paid to members who so wish in lieu of dividend declared at the meeting.\"
On why the director slashed the company\'s dividend by half, the Chairman, Mr. Adebisi Adesanya said the company\'s overall cost of doing business rose during the year, which was absorbed.
He said: \"Our turnover rose from N47 billion to N55 billion, an increase of 17 per cent. Gross profit, however, grew by only 12 per cent as a result of increases in cost of raw and packaging materials. Despite inflation levels of 18 per cent, operating costs increased behind inflation by 14 per cent, resulting in earnings before tax of N3.6 billion, a seven per cent growth on prior year.
\"It is a result of the growth in the overall cost of doing business which had to be absorbed by the company that led the directors\' recommendation of 60 kobo per share as dividend.\"
Responding to the results, the President of Nigeria Shareholders Solidarity Association (NSSA), Chief Akintunde Asalu urged the board to increase returns to shareholders and make it constant instead of allowing it to fluctuate while other variables like technical fees soar on yearly basis.