Vision Group to pay Shs 50 dividend per share

Despite a notable decline in profits, the Vision Group will pay its shareholders a dividend of Shs 50 per share, which translates into a total of Shs 1.4 billion. The dividend, which will be paid on or before Jan 18, 2017, is a little higher than the Shs 35 the listed company paid in 2015 (Shs 881.4 million).

The company, which also offers commercial printing services, publishes several newspaper titles led by New Vision and Bukedde; three TV stations, six FM radio stations and several websites.  It was listed on the Uganda Securities Exchange (USE) in 2004 with some 51 million ordinary shares being issued.
Its majority shareholder is the government of Uganda with a shareholding of 53.3%, while private shareholders comprising institutional and individual Investors hold the remaining 46.7%. The National Social Security Fund (NSSF) is the biggest of the institutional investors with a 19.61% stake.

According to the financial statements that were published on Oct. 07, the company registered a growth of 6.7% in turnover (Shs 92.7 bn from Shs 86.8 bn) with commercial revenue from printing registering the highest growth (39.4%) followed by radio (18.5%). TV grew at 15.8% with advertising seeing the least growth of 3.7%. But profits declined to Shs 4.9 billion from Shs 5.3 billion in the year ended June 30, 2015.

Over the last two years, Vision Group management has been under pressure to devise strategies for increasing revenue, improving operational efficiency, debt financing and rethinking the electronic media division. The issue of high administrative costs that keep nibbling away at profititability has been rubbing the private investors the wrong way in the face of a declining stock value.

But the costs are still showing no signs of abetting. Cost of sales once again shot up by 8.7% compared to last year reportedly on account of imported raw material inputs and electronic media content and other dollar denominated costs. Overall, administrative expenses rose to Shs 13.3 billion in 2016 from Shs 12.3 billion in 2015. Consequently, profit before tax dropped to Shs 7.427 million in 2016 from Shs 7.429 billion in 2015.

The company also reported that some of its non-current assets that include property, plant and equipment had declined in value to Shs 24.8 billion in 2016 from Shs 26.17 billion in 2015.

However, in the context of the depressed economy in an election year, Vision Group’s performance will not disappoint many shareholders given what other companies have experienced. At the USE, the company’s shares are currently trading at Shs 542 per share down from Shs 600 in October 2015.