By Modupe Gbadeyanka
The board of LASACO Assurance Plc has indicated its intention to carry out a share reconstruction exercise, Business Post has gathered.
However, to make this happen, the company wants the approval of its highest decision-making organ, the shareholders.
A notice from LASACO Assurance said it would want the shareholders to authorise this share reconstruction of its existing 7.334 million ordinary shares at the 39th Annual General Meeting (AGM) fixed for Thursday, September 12, 2019 at the City Hall in Lagos.
The board wants to restructure the shares to one new unit for every four previously held by its investors.
“This notice is hereby given that the 39th Annual General Meeting of LASACO Assurance Plc will be held at City Hall, Catholic Mission Street, Lagos Island, Lagos on Thursday, September 12, 2019 at 11am for the following purposes.
“To lay before the members, the reports of the directors, the audited financial statements for the year ended December 31, 2018 together with the reports of the audit committee and the independent auditors thereon. To declare a dividend, to elect directors.
“To authorise the directors to fix the remuneration of the external auditors; BDO Professional Services, who has been appointed as company’s external auditors in place of Doyin Owolabi & Co who retired as company’s auditors having served the statutory five years as stipulated by the National Insurance Commission (NAICOM) code.
“To elect members of the audit committee, to fix the directors fees.
“To reconstruct the existing shares of 7,334,344 ordinary shares [to] one new share for every four shares previously held.
“That the directors be authorised to appoint all necessary parties and to do all such acts and things to give effect to the share capital reconstruction exercise,” the notice said.
Business Post reports that companies use share reconstruction exercise to reduce the number of outstanding shares and then increase their share price proportionately without affecting the total book value of those shares.
Recall that in September 2018, the board of LASACO Assurance said it was planning to raise fresh capital with the creation of additional 40 billion shares.
In its financial statements for the year ended December 31, 2018, the insurer grew its profit before tax by 12 percent to N958.2 million from N854.3 million, while the profit after tax appreciated by 11 percent to N736.3 million from N661.9 million.
In the results released by the company, the gross premium written rose by 35 percent to N9 billion from N6.7 billion, while the net underwriting income jumped by 31 percent to N5.2 billion from N4 billion.
However, the investment income went down by 14 percent to N753.7 million from N874.7 million, while the other income dropped by 67 percent to N190.5 million from N576.4 million.
During the year under consideration, the net claims paid by LASACO Assurance reduced by 8 percent to N1.8 billion from N2 billion.
An analysis of the firm’s balance sheet showed that the total assets depleted by 8 percent to N17.1 billion, while the total liabilities reduced to N8.6 billion from N10.4 billion, with the shareholders’ funds increasing by 4 percent to N8.5 billion from N8.2 billion and the earnings per share (EPS) rising to 13 kobo to 12 kobo.
