“We Are Not Happy”: Guinness Shareholders Query Chairman, CEO Over Failure to Pay Dividend
- The shareholders of Guinness did not receive dividends due to the loss it recorded based on its last financial report
- The shareholders, during the recent annual general meeting, said they are not happy with this development
- They advised the new management to sit tight given the immense level of loan and borrowing on record
- Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market
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The non-declaration of an interim dividend for the period ending June 2023 has drawn the anger of some shareholders of Guinness Nigeria Plc.
They voiced their complaints at the company’s 73rd Annual General Meeting, which took place on Tuesday, October 25, 2023, in Lagos.
The Company, however, attributed its inability to pay dividends to the harmonisation of foreign exchange.
Source: Getty Images
Loan and borrowings doubled
According to Punch, a shareholder, Williams Adebayo, said that the new board has great work to do, despite its problem with forex. He pointed out the sharp difference in retained earnings.
Noting that the loans and borrowings have doubled, he advised the new board to take into consideration how to enrich the bottom line, even if it means raising funds to look for it.
Chairman emeritus of the Independent Shareholders Association of Nigeria, Sunny Nwosu, asked the chairman of the board of directors, Omobola Johnson:
“Madam, why are you not paying dividends? To get to this place is a lot of money. I’m sure when you got into this hall, you were very happy with the number of shareholders who came here. But they are not happy. The cost of transportation to get to this place has increased. Why are you not paying dividends?"
Another shareholder, Nornah Awoh, itemised the different sources via which the group could have paid dividends.
“We have distributable cash of N55 billion, we couldn’t pay dividends. If you come to unclaimed dividends, we have a write-back of N1.1bn, which means that Nigerian investors who haven’t claimed their dividends over the years have donated N1.1bn to the company and Guinness didn’t think to pay dividends.”
John Musunga, the managing director, addressed concerns over dividends by stating that the company had an excellent year in which its revenue increased by 11%.
He added that the company was set to have a very successful year before the government announced its plans for foreign exchange.
However, given that the company was exposed to foreign exchange, the announcement that the currency had changed from N460 to N790 had an impact on the profit and loss position of the business.
“In this situation, our retained earnings declined quite a bit because we had to service that change in FX and our profit and loss position also became adverse as we recorded N18bn in losses. Good practice says that if you don’t have retained earnings or declare a loss, you don’t pay dividends.”
Earlier Legit.n g reported that Guinness Nigeria responded to reports suggesting that it is considering leaving Nigeria due to forex challenges
“We will sell what we produce here”: Guinness to set up new business in Nigeria amid exit rumour
Legit.ng repotted that the Managing Director/Chief Executive Officer of Guinness Nigeria Plc, John Musunga, has said the company may add new products to its product line.
In an interview with the Independent, Musunga disclosed that the company may invest in spirits, as it is easier and costs less to distribute.
In an earlier report by Legit.ng, the company had said that despite economic headwinds that harmed its businesses in the most recent operating year, it managed to survive against all odds.
Source: Legit.ng
