By Modupe Gbadeyanka
Chairman of Berger Paints Nigeria Plc, Mr Abi Ayida, has explained why the board of the company decided to slice the dividend payout for the 2019 financial year.
In the 2019 fiscal year, the organisation rewarded its shareholders with 25 kobo per share as dividend in contrast to the previous year’s 65 kobo per share.
This reduction in cash reward did not go down well with shareholders, who expressed their views at the recently-concluded Annual General Meeting (AGM) of the firm held in Lagos.
At the virtual gathering, though the shareholders commended the company’s financial performance and its heavy investment in automated factory, they appealed to the board and management to increase the dividend of 25 kobo per share next year and also map out a strategy to cope with the impacts of COVID-19 which has become inevitable.
Chairman of the board, while speaking at the meeting last week, stressed that the reward was cut mainly for capital preservation, assuring and investors that ongoing strategic initiatives would drive further growths in sales and profitability.
He expressed gratitude to the shareholders and assured them of greater performance, irrespective of the state of operating environment.
“The lockdown has brought a significant level of uncertainties to the global business environment. We have analysed COVID-19 and determined to brace up.
“Our first approach is preservation of capital. This informed our decision to declare a modest dividend of 25 kobo per share for the review period.
“Our position is that it is better to err on the side of prudence. Our huge investment in automated factory is part of our growth strategy.
“Our efforts shall continue to pay off, the company’s future is bright,” Mr Ayida informed shareholders at the gathering.
The Chairman reassured investors that Berger Paints remains optimistic that it will sustain its growth trajectory in spite of the COVID-19 pandemic and other operating challenges as the paints-manufacturing company grew net profit by 40 percent in 2019.
According to him, the improved performance of the company last year was driven by a re-refocusing on the production of primary products, corporate foresight and innovativeness and huge investment in automated factory among others.
Mr Ayida said the company will soon activate its subsidiary in Ghana, noting that although the conditions imposed on foreign companies by Ghanaian government at the moment are not encouraging.
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