HARARE – Africa’s leading seed producer, SeedCo Limited (SeedCo), has declared a $10 million dividend after registering record-breaking $20,7 million profit for the year to March 31, 2017.
The group’s chief executive, Morgan Nzwere, yesterday said SeedCo will pay out a double dividend to shareholders after the company performed above analysts’ expectations.
“The board is recommending that a dividend of 2,92 cents per share be declared for the year ending March 31, 2017 payable to shareholders in the register of the company as at June 23, 2017,” he said at an analysts briefing in the capital.
Nzwere said the seed producer will also pay an additional once-off special dividend of 1,46 cents per share due to the “exceptional performance in the current year”.
“Shareholders will have an option to elect either cash or scrip dividend,” he said.
The SeedCo boss further indicated that the 41 percent increase in profit after tax benefitted from strong demand for maize seed on the back of a very good rainy season and strong input programmes.
“The out turn was particularly satisfactory given the inventory write-offs, exchange losses and increased finance charges incurred during the year,” he said.
In the period under review, the group’s revenue went up 40 percent to $135 million compared to $96 million in the 2016 comparable period driven by increased maize seed sales volumes.
“Operating costs increased by 22 percent due to impairment of some receivables relating to cotton seed business and increased distribution and marketing costs related to the growth in sales volumes,” Nzwere said.
He added that finance charges increased to $4,1 million compared to $1,9 million last year due to discounting of treasury bills for cash in Zimbabwe and timing delays in payments by some regional governments which led to extended borrowings.
“Property, plant and equipment increased by $3,4 million mainly due to capital expenditure on purchase of a new research farm in South Africa, completion of the first phase of seed drying and processing facilities in Kenya, acquisition of a production farm in Zambia, resourcing of the new research laboratory and replacement of some seed dressing lines in Zimbabwe,” Nzwere said.
SeedCo closed the year with a net cash position of $18 million compared to net borrowings of $9 million last year due to a combination of growth profitability, increased cash sales, aggressive debt collection, reduction in inventories and liquidation of treasury bills.
“The group closed the year with a carryover volume position of almost 20 percent of expected annual sales which is the desired position.
“However, due to increased demand in the new selling season, seed production has been increased by 20 percent, including winter production to ensure that all markets are adequately serviced,” Nzwere added.