Honeywell Flour Mills Plc on Tuesday received the approval of its shareholders to pay a dividend of N1.34bn, representing N17 kobo per share for the financial year ended March 31, 2014.

The shareholders approved the proposal at the company’s 5th Annual General Meeting in Lagos, where the Chairman, Honeywell Flour Mills, Oba Otudeko, informed them that the company overcame the challenges of a tough operating environment to boost its profits.

Otudeko explained that due to automation of several operational processes and better treasury management, which led to general improvement in efficiency, Honeywell Flour Mills was able to grow its profit after tax by 18 per cent to N3.5bn – from N2.8bn the previous year.

Also, in the year under review, the company’s profit before tax and shareholders’ funds rose by 11 per cent each to N4.237bn and N20.6bn, respectively. Its revenue appreciated by 20.5 per cent to N55.084bn, while total assets rose by 15 per cent to N63.8bn.

Otudeko assured the shareholders that regardless of the challenges in the operating environment, the company would continue to improve shareholders’ value and ensure improved return on investment.

“Our focus remains the creation of value for shareholders and increasing the quantum of dividends paid to our equity owners on a sustainable basis,” he said.

The company’s Managing Director and Chief Executive Officer, Mr. Lanre Jaiyeola, explained that it was able to pay the dividend as a result of its increased output and aggressive push to meet rising demand for its products.

Jaiyeola, who said the company had invested in human capacity development, the expansion of its mills to increase production of cassava flour and in research and development among other things, assured the shareholders that the management was committed to ensuring superior earnings in the industry.

On the company’s outlook, he said, “Our goal in the foreseeable future is to increase our market share for all our products by delivering successful brands that meet the yearnings of our customers and consumers.

“This shall grow the value of the business and ultimately lead to further wealth creation for our shareholders.”

In approving the dividend payment, the shareholders commended the company’s board and management for keeping it profitable and sustaining its growth.

The Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, expressed the confidence that when the company concludes its expansion programme, its share price would soar and it would pay higher dividends to the shareholders.

He, however, advised the company to consider raising capital through a rights issue instead of paying interests to banks.

According to him, that will not only benefit the shareholders; it will also boost the share price, which is lower than it should be.

On his part, the President, Nigeria Shareholders Solidarity Association, Chief Timothy Adesiyan, said that considering the numerous challenges the company faced, the dividend paid was impressive.

Adesiyan, while commending that management for how it had managed the company’s affairs, also expressed support for a rights issue, should the board opt for it.

“We cannot leave the projects for the banks alone, we (shareholders) must bring out our check books and contribute,” he said.

The shareholders also commended the Honeywell MD, who was appointed earlier this year for his contribution to the company in the more than 20 years that he has worked there.

Punch