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Shareholders approve CAP’s N336m dividend, task board on profitability



Shareholders of CAP Plc have approved a dividend payout of N336 million, representing N1.60 per share and a bonus issue of one for three as recommended by the company’s board.Beside, the shareholders also tasked the board on the need to enhance the company’s profitability, which will further to an increased return on investment in the company.

Speaking at the company’s yearly general meeting in Lagos recently, one of the shareholders, Mr. Gbadebo Olatokunbo, emphasised on the need for the company’s board to review the issuance of bonus issues to shareholders, while commending the board for the corporate social responsibility actions taken in the course of the December 31, 2009 financial year.

“The company’s board should be commended for the corporate social responsibility programmes embarked upon during the year, especially with emphasis on the educational sector.   However, the issue of declaring bonuses needs to be addressed. The last time a bonus issue was declared was six years ago and we hope not to wait that long before another one is issued”, he added.Another shareholder, Mr. Nona Aworh, stressed the need to address the issue of debtors to the company, while efforts should be directed at reducing the number of unclaimed dividends.

He further noted that the declaration of an interim dividend by the board to shareholders before a final dividend is paid would further reduce the effect of inflation on their purchasing power.On the need to increase the company’s profitability, another shareholder, Mr. Oguntoye tasked the company’s board to review its activities and improve on the result posted in the financial year under review.

In his response, the Chairman of the company, Mt Larry Ettah, explained that the company is working towards enhancing shareholders’ return on investments by making sure that there is a balance between the bonus issues declared and the dividend payouts.According to him, “we would look at how to balance dividend and bonus issues in the years to come. We are not against the issuance of bonus issues. Rather, we are being careful with the approach because enhancing return on investments is based on the value of the company’s market capitalisation which we do not want to jeopardise”.

On the number of unclaimed dividends, Ettah said that the company would use the various advocacy groups to ensure that the number is reduced, while looking at a possibility of government having a policy that would ensure that unclaimed dividends are reverted back to the company for profitability after a number of years.On the company’s result, Ettah explained that the company was able to improve its turnover by 13 per cent to N3.03 billion, despite the challenging operating environment during the year.

“As a result of the Federal Inland Revenue Service (FIRS) tax audit of the company for 2001-2006 accounting years, we have had to provide for a back duty assessment of N176 million. The major issues in the tax audit were the non-collection of VAT on the pharmaceutical products as well as surplus fixed assets disposed. As the VAT law clearly exempts medicines and pharmaceutical products from Value Added Tax, all the sales of our pharmaceutical products over the years were not subjected to VAT. We are engaging with FIRS on these matters”, he added.

A close look at the company’s results for the financial year under review showed that its turnover rose from N2.68 billion in 2008 to N3.03 billion in 2009, while profit after taxation closed at N341 million in 2009, down from N735.6 million in 2008.


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