Shareholders Approve Bonus Issue
Some months back we reported here that DAAR Communications owners of AIT and Ray Power had proposed a 1 for 2 rights issue. It sounded like a mockery at the time I heard it considering that the shares of the company was basically worth 50 kobo or nothing to some people.
Anyway, better to get more shares of no current significant value than get nothing. The shareholders of the company has eventually approved the bonus issue and demanded that the company pay them cash dividend next year. But why propose bonus issue when the company hasn’t provided any significant value in recent times?
Raymond Dokpesi’s Message
An article from Thisday quoted him as saying
1. the bonus was proposed by the board following continued loyalty and commitment of shareholders to the company.
2. He said despite the challenges which the company experienced within the 2012 financial period, it was able to record a turnover of N4.2 billion as against the previous year’s figure of N5.1 billion representing a decrease of 21 per cent.
3. He said following the federal government’s directive that all publicly quoted entities adopt International Financial Reporting Standard by January 1, 2012, the company had fully complied with the directive. This, he noted, necessitated the restatement of certain previous year’s transaction.
4. For instance, he said the 2011 restated profit after tax was N2.69 billion while the profit after tax for 2012 was now N0.273 billion.
5. He said: “Substantial part of these adjustments arise from the accounting treatment of the receipt during the year of the debt owed your company by the Federal Government for providing host broadcast facilities for the 2009 FIFA Under 17 a World Cup.
6. “By these results therefore, I am happy to report to you that your company has returned to profitability.
7. I irrevocably assure you that this trend would be sustained and you would be assured of better returns on your investment in the company in the subsequent years.”
8. He said with the company’s return to profitability, the management was now set to take advantage of opportunities in the operating environment.
9. According to him, “As we look into the future, we expect better operating environment given the government’s commitment to the privatisation of the energy sector which constituted the greatest challenge to business growth.
10. We also believe that there would be relative stability in the macroeconomic policies of the government as well as concrete steps towards addressing the worrisome security challenges in the country.”
11. The DAAR communications boss also expressed optimism that the digitalisation of the broadcast industry would be consciously executed such that the industry operators would derive maximum benefit from the migration.
As a shareholder, are you by any means impressed with any of these statements? Is the company operations run efficiently to warrant any of your investment? Is the shares of the stock liquid enough for you to enter and exit? Are the company’s corporate governance policies anything to write home about? These are questions you should ask yourself before you ever think of investing.