UAC to boost operations through N15.4b rights issue
• Rewards shareholders with N1.92billion dividend
UAC of Nigeria Plc (UAC), has said it plans to boost group operations with N15.4billion rights issue in line with the financial restructuring of its subsidiaries using internally generated funds.
The Chairman, Dan Agbor, addressing shareholders during the firm’s 2016 yearly general meeting in Lagos, on Wednesday, disclosed that the rights issue of Portland Paints has been concluded while the rights issues of Livestock Feeds and UPDC are at various stages of execution, due to delayed regulatory approvals.
He said further: “Grand Cereals also plans to raise equity by way of a rights issue that your company also intends to subscribe for. The board has identified an urgent need to bolster your company’s capital position. This will ensure that your Company is able to subscribe for these rights issues, and provide its subsidiaries with working capital support in a timely manner, so that the subsidiaries can quickly respond to challenges and take advantage of emerging opportunities.”
He recalled that previous plans to raise fresh funds internally rights issues was suspended and announced during the 2025 general meeting, saying: I informed you that the Board had taken a decision to discontinue the 1 for 12 rights issue that was approved at the 2015 meeting, due to the prevailing market conditions.
This comes as UAC rewarded shareholders with N1.92 billion dividend payout, from the group Profit After Tax (PAT) of N5.67billion achieved at the close of the business year in 2016, representing 10 per cent rise over N5.16billin recorded in 2015.
“In view of the Company’s performance, the board is recommending for your approval a dividend of 100kobo per ordinary share in respect of the 2016 financial year,” he said.
Amid harsh operating environment, the company posted group revenue of N84.61billion an increase of 15 per cent compared to N73.77 billion achieved in the previous year.
Agbor attributed the improved performance to cost optimisation initiatives implemented during the year under review, with innovation in key categories and extensive retail market expansion, adding that these helped to offset further deterioration of margins during the year.
Commenting on the outlook for the year, he said the Group will focus on consolidating the 2016 initiatives, support growth and working capital through equity calls, unlock value through the realisation of under-performing assets, and restructure the route to market architecture across the group this year.