By Chinwendu Obienyi
The Board and Directors of UAC of Nigeria Plc (UAC) has announced it has approved N7.1 billion in capital returns to shareholders via a mix of dividends and REIT units totalling N2.47 per share.
This was even as it recommended a total dividend of 120 kobo per share (N3.5 billion) comprising an ordinary dividend of 65 kobo and a special dividend of 55 kobo per share, translating into a dividend yield of 13.8 per cent.
This is coming after the unbundling of UACN Property Development Company Plc (UPDC) REIT units valued at N3.6 billion to UAC shareholders was approved by the Board of Directors and completion is subject to regulatory and shareholder approval as well as the sanction of the court. Following the unbundling, UAC will no longer own any UPDC REIT units, as its shareholders will become direct holders of UPDC REIT units.
The group had received N6.6 billion cash proceeds and 649,392,661 UPDC Real Estate Investment Trust (UPDC REIT) units valued at N3.6 billion, making UPDC and UPDC REIT classified as investments in associates.
The allocation ratio of 0.2254 will see UAC shareholders receive 226 UPDC REIT units for every 1,000 UAC shares owned, providing UAC shareholders with a capital return of N1.27 per share or 14.5 per cent based on the respective market prices of UAC and UPDC REIT as at 29 March 2021.
The proposed initiative will provide shareholders with direct exposure to UPDC REIT and its diverse portfolio of income generating assets, ensuring that shareholders directly benefit from future potential dividend distributions from the UPDC REIT.
According to the company’s audited financial results for the year ended 31 December, 2020, its revenue grew to N81.3 billion from N79.2 billion in 2019, resulting in a 3 per cent increase. However, UAC Plc’s profit before tax (PBT) fell by 31 per cent from N7.45 billion in 2019 to N5.12 billion in 2020 while the profit after tax (PAT) dropped to N3.92 billion from N9.25 billion recorded in the corresponding period of 2019.
Commenting on the result and corporate actions, Group Managing Director, UAC Plc, Fola Aiyesimoju, said the Company’s objective remains to generate attractive long-term, risk-adjusted returns for its shareholders while expressing delight that the Board approved N7.1 billion in capital returns to shareholders via a mix of dividends and REIT units totalling N2.47 per share or a 28.3 per cent return at current market values.
According to him, the company, in spite of the recession, civil unrest and COVID-19 pandemic, executed our key priorities, implemented initiatives relating to UPDC, strengthened management, and steered the company towards prioritising growth.
“Going forward, our focus remains on creating shareholder value and we continue to prioritise growth, scale, and simplicity to achieve this.We will explore acquisitions as an avenue to accelerate growth,” Aiyesimoju noted.