Comparex Holdings has announced that it will distribute about R1.62 billion to its shareholders next month.
Shareholders will receive a special dividend of R5.50 a share, to be paid out on 15 March.
CEO Peter Watt says a further distribution will be considered as part of a restructuring that will see unwinding of the holding company and the listing and unbundling of Comparex Africa Group.
Comparex`s large cash pile was the result of the sale of the group`s European networking operations to Dimension Data in 2000.
The cash was also a major factor in a 2002 boardroom coup that saw institutional investors replace certain directors with their own nominees.
The investors had been unhappy with the fact that the cash was being spent on the haemorrhaging European business instead of being distributed to shareholders.
The European business was subsequently sold to management.
Watt says a circular will be sent to shareholders outlining the board`s recommendations with regard to, among other things, the rationalisation of the Comparex group structure, the delisting of Comparex Holdings, the listing of Comparex Africa Group, the unbundling of Comparex Africa Group to shareholders and the return to shareholders of any remaining surplus cash.
Interim results
Commenting on the group`s results for the six months to 30 November, Watt says Comparex continues to operate in a depressed and highly competitive market, reflected in operating results that recorded depressed margins in the period.
On a continuing basis, revenue of R1.43 billion compared with a previous R1.4 billion. During the period the group adopted the AC133 accounting standard. Excluding the AC133 adjustment, revenue was flat.
An operating profit of R81.9 million includes an AC133 adjustment of R23.9 million. Watt says the elimination of the adjustment to enable comparison to the prior period results in a decrease in operating profit from R82.1 million to R58 million.
Competitive pressures in the local market were offset to some degree by the company`s successful growth into Africa where revenue grew by 208% during the period. As the margins on some of the major African contracts had to be shared with local business partners, this diluted the group`s normal margins.
"There are some encouraging signs of an upturn in the global IT market, which are likely to impact positively on us in Africa," says Watt. "That said, we still see local market conditions as remaining challenging, but we are well placed to maintain our current level of headline earnings."
An attributable profit of R117.1 million compares with a previous R103.7 million.
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