Following complains among shareholders due to high cost of finance charges, the chairman of Flour Mills of Nigeria Plc, John Cocumantaros, said they may consider approaching the market for a right issue. He disclosed this on Wednesday September 6, 2017, while answering questions from newsmen shortly after the company 57th, Annual General Meeting (AGM) in Lagos.
Just as shareholders approved N1.00 dividend that was recommended for the financial year ended March 31, 2017. The dividend was declared out of the company accumulated pioneer profit. According to the company, the dividend warrant will be posted on Tuesday September 12, 2017, to all shareholders whose names appear in the register of members at the close of business on Friday August 4, 2017.
In a related development, shareholders at a court ordered meeting today approved the merger of Golden Penny Rice Limited with Flour Mills Nigeria Plc. The merger according to Mallam Shehu Mekaihi National President of Constance Shareholders Association of Nigeria, will enable the company to reduce the cost of taxation on the company which has been operating as a separate entity.
Still on the right issue, it would be recalled that in 2015, at an extraordinary meeting, shareholders authorized the directors to raise up to N40 billion of additional equity through a right issue. But according to Flour Mills Chairman, “given the economic headwinds being experienced in the country, the directors decided to undertake the right issue through a “Shelf Program”, which enables the company to raise the required funds in several tranches over a three year period”
He explained that a N40 billion Shelf Program has now been registered with the Securities and Exchange Commission (SEC), and will continue to assess the economic climate to determine the most appropriate time to launch the first tranche.
On the financial performance, the company posted a revenue of N375 billion, which a growth of 51 percent over the N248 billion that was recorded same period in 2016. Profit after tax went down from N10.4 billion in 2016 to N9.8 billion in 2017.