Sunday, January 29, 2023

No dividends for G4S Botswana shareholders

Despite recording an increase in revenue year on year, G4S Botswana says its profitability and operating cash flow has declined. This has forced the Botswana Stock Exchange (BSE) quoted Security Company to retain cash and not pay interim dividend to its shareholders.

The security solutions provider’s major shareholder is G4S International UK Limited which holds 70 percent, while Botswana Public Officers Pension Fund (BPOPF) has a 9.96 percent stake. Other shareholders include Motor Vehicle Accident Fund (MVA), Debswana Pension Fund and Stanbic Botswana.

This past week G4S Botswana board said that following the compilation of the financial results for the half year ended 30 June 2022 and an assessment of the company on its “solvency and liquidity” in conjunction with short term working capital and capital investment requirements, a decision was taken not to declare an interim dividend.

The group’s financial results for the period under review reflect an increase of 11 percent in revenue to P105.4 million (HY 2021:P95.2 million) attributable to large contract wins and strong customer retention during the second half of 2021.

For the period under review, G4S’s gross profit also increased by 9 percent to reach P26.3 million (HY 2021: BWP24.2 million). However, the group’s Net profit for the period decreased by a huge 78 percent reaching a low of P2.3 million as compared to P9.7 million made in 2021. The group’s Basic earnings per share were 3.12 thebe (HY 2021: 12.02 thebe) while shareholders’ equity was P120.3 million (HY 2021: BWP108.2 million).

“The Board has assessed the solvency and liquidity of the Group, in conjunction with short term working capital and capital investment requirements and has taken the decision not to declare an interim dividend. The Board notes that despite an increase in revenue year on year, profitability and operating cash flow has declined. The dividend proposal will be revisited based on full year results”, reads part of the notes accompanying G4S’s latest financials.

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