Despair as BTCL withholds dividends to store cash
Pauline Dikuelo | Friday August 7, 2020 14:08
The decision has triggered despair amongst the corporation’s retail investors, many of whom have remained faithful to the group despite the fall in the value of their shares from the P1.15 listing price in 2016 to the current 86 thebe.
In financials released last week, the BTCL recorded comprehensive income of P106.4 million for the year ended March 31, 2020, down from P162 million for the previous year. Earnings per share were pegged at 10 thebe compared to 15 thebe the previous year.
Directors, however, said tough decisions had to be made. “Due to the uncertainties presented by the COVID-19 pandemic, the board has recommended that out of prudence no final dividend be declared in order to retain cash in the business,” directors said in a statement accompanying the final results. Shareholders will have the opportunity to scrutinise the results and vote on the dividend decision at BTCL’s upcoming annual general meeting.
BTCL has the highest density of retail or individual shareholders on the Botswana Stock Exchange, following a successful Initial Public Offer in 2016, which marked its privatisation. Of the 1.05 billion shares listed, individual Batswana hold 32%, many of them holding less than 1,000 shares individually. At least 80% of shareholders hold less than 5,000 shares each, with many looking forward to the biannual dividends for extra income. Since its listing, the corporation has faithfully declared dividends, despite fluctuating results which include a P371 million loss in its first year as a listed company. Tselanngwe Matlhaku, who bought shares in BTCL at its listing, told BusinessWeek he was ‘seriously considering’ disinvesting despite the fact that the shares are presently trading at less than the price they listed at.
“BTCL has let us down because there has been no growth over the whole period that we have been invested with them,” he said. “If they are not paying dividends, it’s farewell because we put our monies there, not to pay salaries and others, but to get something out.
“It’s been a total disaster and I foresee many withdrawals. “We hear about the investments in landlines and mobile and the revenues, but we are not seeing that value. “Why should we hold on?”
BTCL directors said they would strengthen the group’s financial position by improving on product offerings/service areas, reviewing capital investment and strict monitoring of cash flow projections monthly.
“The recoverability of the current assets is dependent on the financial health of the companies using BTC products and services. As at March 31, 2020 the current assets far exceed the current liabilities and thus BTC can meet its working capital requirements,” the directors said.