Shareholders of Mechanical Lloyd Company Limited, an automobile firm in the country has expressed concern over the dividend per share declared by the company for the 2011 financial year.
Although the company declared a dividend of GHC 0.0080 per share representing a 33 per cent increase of the 2010 figure of GHC 0.0060, shareholders registered their displeasure over the low amount and called for more efforts from management to increase it in subsequent years.
The shareholders were of the view that should the management of the company cut cost in certain areas, it will reflect positively on the profit margins of the company and also impact positively on the dividends declared.
One of the shareholders, Mr J.E.Y Aboagye together with others who spoke at the company’s Annual General Meeting asked management to cut down cost with respect to the venue used for the meetings so they can get more dividends.
In many instances, there are reports of the lavish expenditures of executives of companies listed on the local bourse which becomes a huge cost to the companies.
It has been observed that managing directors and some other general managers in many companies across the globe and in Ghana as well enjoy what shareholders describe as lavish expenditures which only make them good at the expense of the totality of the workforce.
In many instances, the remuneration of the executive management, normally less than 10, is almost the same as the total workforce of the company and in instances where the company is listed on the stock exchange, dividends of the shareholders is also affected.
In responding to the concerns of the shareholders, the Managing Director of the company, Mr Terence Ronald Darko, explained dividends declared are based on the profit the company makes.
The dividend policy of the company he said was to allocate 25 per cent of their after tax profit to declare the dividend per share, adding that the company recorded a higher profit last year which resulted in an increase in the dividends for the year under review.
Mr Darko thus advised shareholders to look at the dividend declared by doing some calculations on the price and earnings per share and they would realise the company is declaring the right dividend and not judge based on the figures they see.
He however explained to the media that no matter what dividend a company declares shareholders would always want more and thus described their concerns as a normal phenomenon.
The Board Chairman of the company, Mr Charles B.K. Zwennes in his report said for the 2011 financial year, the company recorded a Profit After Tax of GHC 3,185,739 as against the GHC 1,454,239 it recorded in 2010.
The company he said also achieved a turnover of GHC 33.86 million in 2011, representing an increase of 18.97 per cent over the figure of GHC 28.46 million it recorded in 2010.
“Motor vehicle sales increased by 16.41 per cent and spare parts workshop earnings by 31.38 per cent, while selling, general and administrative expenses as a proportion of revenue was maintained at 17 per cent in 2011,” he said.
He said after adjusting for other income of GHC 2,896,124 which arose mainly from fair value gain on investment property, and net finance costs of GHC 123, 455, the company ended the year with a net total comprehensive income of GHC 3, 185, 739 which was 119 per cent higher than the 2010 figure of GHC 1,454,239.
Presenting an overview of the performance of the company’s brands in 2011, he explained Ford achieved 93 per cent of projected sales which was still 15 per cent above total sales for 2010.
“With the SUV’s, the new Explorer and Edge are making a very positive impact having already outperformed their target by over 60 per cent despite delivery delays,” he said.
The BMW he also explained improved its sales performance for 2011 achieving 98 per cent of its target for 2011.
With respect to the Massey Ferguson (MF), Mr Zwennes said anticipated sales that could not come through in 2010 because of delivery delays materialized in 2011 and helped MF to achieve 144 per cent of its target.
The future outlook for this year he said was promising as the company was poised to make positive forward strives.
The company he said had heeded the call to “go west” and has thus begun the construction of a branch at Takoradi with facilities to provide their full range of services adding “this should be completed and be operational by the 1st quarter of 2014 further extending the horizons of our company and positioning it to take advantage of potential economic opportunities in that part of the country.”
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