Companies fail to declare dividends


MOST companies that have released their 2014 annual financial reports have indicated an inability to declare dividends owing to poor business, underlining a difficult commercial environment which has eroded return on investment for shareholders.


African Sun Limited and CFI Holdings published their financials for the year ended September 30 2014 last week and both groups indicated that it would be inappropriate to declare a dividend for the year.

African Sun group chief executive officer Shingi Munyeza said the current difficult operating environment and subdued performance had caused the failure to declare a dividend, in its audited financial statement.

“The group reported a loss for the year of $229 million which was an improvement of 74% from a restated loss of $883 million incurred last year,” Munyeza said.

Despite the hotelier failing to declare a dividend, its financial review showed an increase in revenue by 13% to $56,72 million from $55,97 million achieved in the previous year.

“The increase is fully attributed to the revenue contribution of African Sun Amber Hotel Accra which was opened during the year, albeit it is still to achieve full potential,” Munyeza said.

“On a like for like basis, excluding the new Ghana Hotel, revenue decreased by 20% on last year.”

It said occupancy remained flat at 48%, saying an 8% increase in rooms capacity was offset by a decrease in actual rooms sold.

The organisation gave a negative outlook forecasting on the domestic market to remain depressed increasing the need to institute further efforts to reduce the cost of sales and operating costs as well as improving foreign arrivals and further debt reduction.

“In spite of the worsening trading conditions experienced in the first quarter of the 2015 financial year, notable improvements in performance have been realised with revenue growing by 12%over prior year as the revenue contribution from the new Ghana Hotel increased to 10% up from 4% achieved in the full year to September 2014,” it noted.

In their unaudited financial report, CFI Holdings Limited said in view of the loss it incurred and the need to raise equity capital, it was inappropriate to declare a dividend.

The agro-industrial conglomerate manages Agrifoods, Hubbard Zimbabwe, Glenara Estates, Farm and City, Victoria foods, Crest Breeders International, Maitlands Zimbabwe, Agrimix, Vetco and Suncrest Chickens.

“Group turnover for the year declined by 17% to $72,1 million compared to $87 million achieved in the same in the previous period in prior year,” said group chairman Simplicious Chihambakwe.