GFH Announces FY2019 AGM - Time for Shareholders to Review Suggested Questions for AGM

What Did Umberto Say About the Ignorant?

GFH has announced its FY2019 AGM date and agenda on the BSE. 

The meeting will be held 23 March.

If there isn’t a quorum, the second meeting will be on 30 March and, if necessary, a third on 6 April.

Shareholders will certainly benefit from a close reading and re-reading of my previous posts on GFH’s FY 2019 performance and as well my analysis of what is behind GFH’s rather expensive foray into Treasury Shares as preparation for the upcoming AGM.

Of note from the agenda is GFH’s recommendation that shareholders approve a 5.57% cash dividend (approximately US 50 million).

That represents some 63 % of GFH’s FY 2019 income attributable to GFH shareholders.

In that context, I’d remind shareholders and readers that in February GFH “successfully priced” a USD 300 million sukuk at 7.5% fixed per annum. Quel succes.

 

In my post I noted that during FY 2019 GFH engaged in purely discretionary uses of cash of some USD 140 million.

If it had forgone these, it could have raised USD 140 million less saving USD 52.5 million in interest over the life of the Sukuk.

Adding in the USD 50 million in dividends, adds another USD 18.75 million to interest, bringing the total to USD 71.25 million.

AA is frankly stumped to come up with a sound business rationale for such an action.

It would, however, neatly fit with the theory that GFH’s Treasury Share and Dividends are designed to prop up its share price rather than build new value for GFH’s shareholders.