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Mutual Benefit to propose dividend for the first time since 2008

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Mutual Benefits Assurance Plc

Shareholders of Mutual Benefits Assurance Plc finally have a reason to smile, as the company appears set to break its 9-year dividend drought.

In a recent notice sent to the Nigerian Stock Exchange informing it of board approval for its 2017 results, the company hinted at the possibility of dividend payment. Mutual Benefit last paid a dividend in 2008.

At its meeting held on the 22nd of February 2018, Mutual Benefit’s board of directors approved dividend payment. Details of the recommended dividend will be communicated to the Exchange (NSE) after the approval of the audited financial statements by the National Insurance Commission (NAICOM).

Insurance companies on the NSE, have a history of poor performance in terms of price appreciation and corporate governance. The recent shift in the minimum price floor to N0.01 left many insurance stocks hard hit.This may have been an impetus for the proposed dividend payment.

How were accumulated losses wiped?

As at when this article was written, Mutual Benefit was yet to publish its 2017 Full results. However, its most recent result was its 2017 9 Months results which showed that the company had accumulated losses (negative retained earnings) of ₦1.2 billion.

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Companies are barred from paying dividends while they have negative retained earnings (This indicates Mutual Benefits now has positive retained earnings. The company does not also have a Share Premium account, which is typically how accumulated losses can be set-off against to allow for dividend payments.

Its recent rights issue which sold for 50 kobo did not have any Share Premium thus we do not know for sure how the company will fund dividend payment.

Mutual Benefits shares are currently trading at ₦0.33 in today’s trading session, down 2.94%. Year to date, the stock is down 34.94%.

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Results for the 9 months ended September 2017 show gross premium written increased from N9.8 billion in 2016 to N10.5 billion in 2017. The company made a profit before tax of N1.1 billion in 2017 as against a loss before tax of N324 million in 2016.

It could pay dividends this year if its profits for the year is so good that it exceeds the accumulated losses and retains some profits where it can pay dividends from.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via [email protected]

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Coronavirus

COVID-19: FG to inaugurate 18-man vaccine task team

FG has announced plans to set up an 18-man Covid-19 Vaccine Task Team with the responsibility to acquire and deploy vaccines in the country.

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Minster for health, FG ignores travel ban calls despite Uganda, US, others move against coronavirus, FG reports 10 new cases of COVID-19, COVID-19: FG to inaugurate 18-man vaccine task team

The Federal Government has announced through the Ministry of Health, that it will inaugurate an 18-man Covid-19 Vaccine Task Team, in a bid to ensure vaccine security In Nigeria.

This was disclosed on Monday by the Health Minister, Dr. Osagie Ehanire, during the daily briefing of the Presidential Task Force (PTF) on COVID-19 in Abuja.

He revealed that the need for a task force comes as vaccines would be made available globally. The responsibilities of the task force include the acquisition and deployment of vaccines in the country.

Now that vaccines are known to be close at hand, the Federal Ministry of Health is taking measures toward vaccine security, for which an 18-man National COVID-19 Vaccine Task Team with seven Terms of Reference (ToR) will be inaugurated.

“The ToR will include generating strategies for acquisition, deployment, and options for licensed production by Biovaccine Nigeria Ltd.

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“Our options with WHO/GAVI led Covax facility remains our first line of engagement,” he added.

(READ MORE:

(READ MORE: COVID-19 Palliatives: CACOVID donation is 95% complete – PTF)

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What you should know  

After news of the Pfizer vaccine went viral, Nairametrics reported that the Health Minister, Dr. Osagie Ehanire, said Nigerians will benefit early from COVID-19 vaccines when the product is made available for commercial use. He revealed that any vaccine that is deemed fit for commercial use in treating coronavirus will be made available early to Nigerians.

Nairametrics also reported plans by the Nigerian government to set up a vaccine production company in Nigeria to boost local COVID-19 vaccine production.

The G-20 nations announced a pledge to pay for vaccine distribution to developing nations that can’t afford it. The leaders also announced a debt extension programme to developing nations during the weekend’s G-20 summit.

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Economy & Politics

Gov. Makinde presents N266 billion budget to Oyo State House of Assembly

Governor Seyi Makinde has presented a ₦266.64billion budget proposal to the Oyo State House of Assembly.

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The Oyo State Governor, Seyi Makinde, presented the Budget Proposal for the 2021 Fiscal Year to the Oyo State House of Assembly. The total budgeted sum is ₦266.64billion, with education expected to receive N56.35billion – 21% of the budget and a rise from N12 billion budgeted in 2019.

This was disclosed by Governor Makinde in a social media post on Monday.

According to NAN, Mr. Makinde disclosed on social media that the ‘Budget of Continued Consolidation’ was prepared with input from stakeholders in all seven geopolitical zones of the state.

The total budgeted sum is ₦266.64billion The Recurrent Expenditure is ₦136.26billion, while the Capital Expenditure is ₦130.38billion. We are again, aiming for at least 70% implementation of the budget,” he said.

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The News Agency of Nigeria also disclosed that infrastructure spending in the budget would be N46.06billion – representing 17.27% of the total budget and an increase of N33.66 billion over that of last year.

Other sectors include Agriculture which represents 3.6% valued at N9.58billion and Healthcare taking 4.9% of the budget with an N13.29billion allocation.

(READ MORE: #EndSARS: Nothing wrong with social media bill – Ali Ndume)

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The Governor disclosed that Oyo has reduced its infrastructure deficit and made improvements in the areas of healthcare, education, and others.

We have been able to lower our infrastructural deficit, make improvements in healthcare delivery, improve the quality of education, and achieve milestones in our security systems,” he said.

He also added that the state had recorded a 26% increase in IGR at N25.6 billion and hopes to increase IGR to over N100 billion for the 2021 budget.

As of September, we had recorded an IGR of N25.6 billion. And using the half-year figures, it represented a 26.4% increase in IGR year-on-year. Oyo State’s IGR is presently about 32% of actual aggregate revenue.

“We still have not achieved a total dependence on the state’s income outside of the federal allocation to fund the budget. Slowly, but surely, we are getting there.

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“For the 2021 budget, our plan is to increase our annual IGR to N102.82billion. We hope to achieve this by widening the tax net to bring in more taxpayers into the system,”  he added.

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Economy & Politics

Restructuting: Plans must pass through legal process from the National Assembly – Tambuwal

Tambuwal has insisted that plans to restructure Nigeria and the Constitution must pass through due process from the National Assembly.

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The Governor of Sokoto State and Former House of Reps Speaker, Aminu Tambuwal, has said that any plan to restructure Nigeria and the Constitution must pass through legal due process from the National Assembly.

Tambuwal disclosed this at a plenary session of the 26th Nigerian Economic Summit, titled: “Building partnerships for resilience” in Abuja on Monday.

Tambuwal warned that Nigeria must learn from mistakes 0f 2015 when the last attempt to amend Nigeria’s constitution was rejected after the first reading.

He added that any plan to restructure must be done after amending the constitution, which must pass through the assembly.

“As it were at the moment, whatever you are going to do about the constitution, has been prescribed by the constitution and how you are going to do it.

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“The constitution has prescribed how a word in that constitution is going to be amended.

“Except of course we are saying we are going to jettison the National Assembly and the State Assemblies in getting it done, which is not possible,” he said.

“So you cannot go outside of the constitution to amend the constitution. We better come to terms with this realization and to come together and agree on how best we can work together to achieve what the nation desires,” he added.

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What you should know 

The agitations from the October protests in Nigeria have revived talks about restructuring in Nigeria. Earlier this month, the Governors of Ekiti and Kaduna State, Kayode Fayemi and Nasi El-Rufai argued that restructuring was a means to end Nigeria’s economic troubles.

“In essence, our desire to build a more perfect union should be anchored on the principle of devolution of powers – that is, re-allocation of powers and resources to the country’s federating units.

“The reasons for this are not far-fetched. First, long years of military rule have produced an over-concentration of powers and resources at the centre to the detriment of the states. Two, the 1999 Constitution, as has been argued by several observers, was hurriedly put together by the departing military authority and was not a product of sufficient inclusiveness.

“All points considered, the fiscal burden of maintaining a largely inefficient and over-bloated bureaucracy is a metaphor for shooting oneself on the foot,” Fayemi said.

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