Costain WA continue denial of dividend to investors

Costain WA continue denial of dividend to investors


Proshare NI

November 06 2008 at 18:00 GMT



Construction giant Costain West Africa Plc (COSTAIN) has continued its denial of dividend payout to investors of the company. This was confirmed at the companies 60th Annual General Meeting (AGM) held in Lagos Nigeria.


Phil Wharton, Managing Director/Chief Executive Officer (MD/CEO) of the company confirmed to Proshare NI that COSTAIN has a Profit and Loss deficit and thus cannot pay dividend to its investors.


“We cannot do it, as I speak with you, we have a Profit and Loss deficit and it would take some time before we can pay dividend.


Wharton confirmed to Proshare NI that COSTAIN still has about N936 million negative in its Balance Sheet and cannot pay dividend out of its reserves until the company bounces back to reckoning.


He affirmed that the N9.1 billion COSTAIN made in its 2007 hybrid offer was only received sometimes in April 2008; when the company’s Financial Year End (FYE) was March 31 and therefore could not use the funds.


“There was no way, we could reflect in last years account money received this year” Wharton said.


He further affirmed that if COSTAIN has made a N936 million profit, we would be in order to pay dividend.


From the company’s financial document made available to Proshare NI, Turnover increased from N3.016 billion in year 2007 to N3.814 billion in year 2008 indicating an increase of 26 percent in the review period.


While Profit before Tax (PBT) rose from N114.263 million in year 2007 to N380.516 million in year 2008 showing a rise of 233 percent. Profit after Tax (PAT) also grew from N107.963 million in year 2007 to N353.217 million in year 2008 representing a growth of 227 percent


Wharton in a reaction to a question from Proshare NI on when to commence dividend payment if the company bounces back affirmed that it is still Half Year End (HYE) coupled with the current global financial crisis and thus, still too early to comment on the issue.


“We are only half way through the year and in the middle of a world financial crisis, so I am afraid; it will be foolish of me at this stage to say that the deficit would be severed” he said.


He also affirmed that due to the current Capital Market meltdown banks in Nigeria are not really stable, things are not alright and there is the  question of if  the housing market would be sustained or not.


Apart from these, Wharton further affirmed that foreign companies are stopping investments in Nigeria because of other financial constraints.


“We have just secured a major contract with a private international company and because of the financial constraint outside Nigeria, they have decided now not go ahead with it”


Wharton again affirmed to Proshare NI that COSTAIN would strive to do its best for its shareholders as the company has always done since he took over the mantle of leadership at the construction company.


However, Mohammed Koguna, Chairman of COSTAIN affirmed to shareholders that the company is on course to achieving greatness and lasting profitability, “and this is irreversible” he said.


Koguna further confirmed that the reason shareholders of COSTAIN would not be getting dividend is that the company is consolidating and is committed to creating sustainable value on their investments.


“Following our plans, it will not be long before you get dividend on your investments” he said.


In same vein, the company has reported 1,280 unclaimed dividend warrants by investors of the company.


This was also contained in the financial document made available to Proshare NI.


The report affirms that the company did not declare dividend for more than five years, however, its records shows that some dividend warrants over the past years have not been presented to the bank for payment.


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