Transcorp rewards shareholders with N3bn dividend

Transcorp Hotels is set to reward her loyal investors with N3.040 Billion profit at 40k per share having declared N3.7 Billion as profit after tax at the end of 2016 business year.

This was approved by the shareholders during the Transcorp Hotels Annual General Meeting which took place on Wednesday in Transcorp Hilton Abuja.

While addressing the shareholders, Chairman of Transcorp Hotels, Olorogun O’tega Emerho said the 2016 financial year was eventful as “we fully commercialised the Transcorp Hilton upgrade project, a huge effort to transform the hotel to comply with full global luxury standard, among many other projects we started.
“Transcorp Hotels did not rest on its oars in 2016. Transcorp Hotels turnover of N14.6 Billion surpassed 2015 (N13.4 Billion) by 9 percent. Gross profit was N11 Billion which exceeded prior year (N10.3 Billion) by 7 percent. Profit before tax was N5.2 Billion compared to N5.5 Billion in 2015. An improvement of 4 percent was recorded in Profit after tax of N3.7 Billion as against N3.6 Billion in 2015” Emerho stated.

The Managing Director of the Hotels, Valentine Ozigbo said that the task of getting revenue to break out from the up and down swings the company has been experiencing in the past six years was a herculean task.

According to him, “The company’s Gross Profit was N11 Billion (2015, N10.3 Billion). This improvement was due to higher revenue. Profit before tax was N5.2 Billion (2015, N5.5 Billion) while the Company’s Profit after tax for the year was N3.7 Billion (2015, N3.6 Billion). This is inspite of the reduction in the number of rooms and escalating cost of operation.
“The company has maintained a stable balance sheet consistent with the prior year. Total asset was N88 Billion (2015, N89 Billion), while total liability reduced by N1 Billion to N36 Billion in 2016,” Ozigbo said.

Ozigbo maintained that the profit performance of the company has followed even a wider swing than revenue, but a strong growth in 2016 has sustained the company on the path of recovery for the second year, with an after tax profit of N3.7 Billion, close to the projected figure of N3.8 billion which is the highest profit figure in three years and yet well below its peak profit record of N6.96 billion in 2011.

Revenue analysis showed that cost of sales went up slightly last year from 24% to 25% of turnover, which prevented the company from growing gross profit as fast as revenue during the year. Administrative expenses grew well ahead of revenue at over 22% in the year, but an outstanding growth of 414% in other operating income to N560 million moderated the increase.

Reacting to the declaration, Iyabo Olufemi one of the shareholders was not happy with the 40 kobo dividend, saying that he had expected more from Transcorp since the new management took over.

“After more than ten years, I am yet to recoup my investment in Transcrop. I spent a lot of money on the Initial Public offer and since then, I have not recovered my capital. This stock is very slow, yet a lot of activities take place in Transcorp. I feel that the management should be more prudent with the resources.”

Another shareholder, Abdulkareem Ojo expressed his satisfaction with the management of Transcorp and was hopeful that the next year will be better.

“The economic recession is everywhere and Transcorp does not exist in isolation. I am even surprised that they declared some profit. Most organisations did not declare anything this year. Although I bought my shares just two years ago, I am optimistic that the share will appreciate by the end of this year,” Ojo said.

However, some shareholders were visibly angry with the Registrars as they could not find their names on the list so as to take their share of the package that was set aside for shareholders that were present. It took high level diplomacy from the organisers to bring the crowd to order.