G4S, the titanic security company listed on the Botswana Stock Exchange (BSE), is mulling over plans┬áaimed at a share split in a bid to make its stock┬áaccessible to potential┬áBatswana investors, the┬ácompany has confirmed.
“The board is looking at the┬ápossibility of share split in an attempt to improve liquidity on the company stock,” Molefe┬áMatlhape, Acting Managing Director for G4S, said.
The board’s┬ádecision,┬áwhich is not yet known,┬áwill be taken either to┬ánext AGM or, failing which, an EGM will be called to┬ágive it some weight.
Though the board has not yet made up its mind on the issue, it is┬ámost likely that the┬áshare split would be on┬á10: 1 ratioÔÇömeaning that┬áone would need┬á2,800 thebe to acquire a block of shares.
At the moment the┬ácompany is trading at 2810┬áthebe per share on the BSE.
Matlhape was speaking at a press briefing to mark the┬áannouncement of the┬ácompany’s┬ásterling half year results┬áthanks to┬áresilient┬ácash transport business that surged up by 72 percent.
Revenue for the six-months to June 30, 2010 swung-up 10.6 percent to P 73 million against the 18.2 percent like-on-like in the previous period. Profit before tax was 17.2┬ápercent better┬áat P 15.6 million as management cheered on the sides.
The company┬árecommended an interim dividend of 223.70 thebeÔÇöwith 150 thebe┬áof that figure being a special divided.
“We are pretty confident about the future developments of the company despite challenges,”┬áMatlhape┬áhas said.
Over the last six months G4S two main products guarding and security systems┬ácame under pressure due to a variety of reasons but Matlhape was bullish that they will tackle the challenges head on by introducing┬ánew products┬áinto the┬ámarket.
The news of a share split were met with a muted┬áexcitement from┬áanalysts who said┬áalthough┬áit is likely to broaden the participation, it does not address the critical issue of┬álack of liquidity in the market.
“An increase in the free float is the only thing that can increase liquidity in the market,” Chief Executive Officer for Capital Securities, Gregory Matsake, said.
G4S International controls 70 percent of the company while the remaining┬á30 percent or 8 million┬áshares are on the┬áfree floated on the BSE.┬á
“It does appear that they (G4S) do not see any value in trading on the stock or it is just simply that┬ámanagement is not incentivised by share options. Really, they do not need to be holding 70 percent to be the main shareholder in the company,” he added.