Monday October 10, 2011
Guinness Anchor is in net-cash position, is seeking ways to reward shareholders
By TEE LIN SAY
linsay@thestar.com.my
PETALING JAYA: Guinness Anchor Bhd (GAB) shareholders may be in for a reward as the company is in a net-cash position as of June 30, 2011, analysts said. The company has a net cash per share of 60 sen.
“There has been no firm sign of a capital repayment from the company. However, during their last briefing, there were indications that they were looking at ways to reward shareholders,” said one consumer analyst who attended the company's fourth-quarter results briefing.
A research head agreed that the company was considering such a payout. “We are not sure of the quantum but timing-wise, it will probably happen towards the end of its financial year.”
Ireland: ‘Our cash position varies depending on working capital and capex requirements.’It is common for cash-rich brewers to surprise shareholders with capital repayments. Last year, Carlsberg Brewery Malaysia Bhd rewarded shareholders with a dividend payment of 58 sen after it acquired Carlsberg Singapore Pte Ltd for RM370mil in the fourth quarter 2009.
Carlsberg's special dividend of 58 sen was an improvement from 23 sen in 2009.
With the new contribution from Singapore, Carlsberg's revenue grew 30.9% to RM1.37bil in the financial year ended Dec 31, 2010 while profit after tax increased 74.8% to RM134.1mil.
“Guinness has for several years maintained an informal dividend policy of 85% to 90% of our net profit. We do not expect this policy to change in the near future. Our cash position varies depending on working capital and capex requirements at different times of the year,” GAB managing director Charles Ireland told StarBiz.
GAB has declared total dividends of 54 sen for the year ended June 30, 2011. In its fourth-quarter results briefing in August, it declared a final dividend of 44 sen, bringing total dividends to 54 sen per share for FY11. This is an increase of nine sen compared with FY10. The 54 sen net dividend represents about 90% dividend payout and net yield of 5%.
A spokesman for Carlsberg said that Carlsberg Breweries AS, as a majority shareholder of Carlsberg Malaysia, had supported the proposal to distribute net dividends of between 50% and 70% of annual profits, subject to funding requirements and cash availability for the current financial period to 2013.
“The final special dividend for 2010 was much higher than the undertaking given. This was due to the positive cashflow and after considering Carlsberg Malaysia's funding requirements.” the spokesman said.
Carlsberg declared a five sen gross dividend for the second quarter to June 30, 2011. This was lower than the 7.5 sen it had paid in the previous corresponding period. As of Dec 30, 2010, Carlsberg had net cash per share of 16 sen. Analysts estimated the company had a net cash per share of 11 sen for the financial year ending Dec 31, 2011.
Meanwhile, the consumer analyst maintains her forecasts on GAB on an unchanged dividend payout ratio of 90% per year, translating into attractive yields of 5% to 6%.
A CIMB analyst said GAB's capex this year was expected to double from the historical RM30mil to RM40mil range as it planned to install a new keg at its brewery and invest in new IT infrastructure.
“We have already projected RM60mil capex for this year. Despite the higher capital expenditure, GAB's dividend payout will remain in the range of 85% to 90%,” she said.
For the fourth quarter ended June 30, 2011, GAB's revenue increased 12.97% to RM348.76mil while net profit dropped 18.04% to RM29.08mil. For the entire year, revenue increased 9.57% to RM1.49bil while net profit increased 18.79% to RM181.38mil. GAB had cash and cash equivalents of RM179.78mil.
GAB continues to retain its top position in the malt liquor market (MLM) with a 59% market share.
An analyst said the MLM growth forecast was maintained at 5% to 6% per year, buoyed by more brewer organised events and the special UEFA European Cup 2012.
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