[2008-08-01]  UCL investors to miss out on dividends
Uganda Clays Ltd shareholders will this year miss an interim dividend despite a good performance that saw the company register a net profit of over Shs1.46 billion for the first six months of the year.

According to a statement, the company’s board is not recommending paying an interim dividend because of the investments in the new factory in Kamonkoli, Mbale District.

“We are not paying an interim dividend for this year because the company is spending a lot of cash on the Kamonkoli factory but we are recommending a total final dividend of Shs500 million for the year that ended on December 31, 2007,” said Mr John Wafula, the UCL’s chief executive officer.

The Kamonkoli factory, according to Mr Wafula, will cost UCL up Shs25 billion, of which over Shs11b was raised from the company’s rights issue in April.

The recommended dividend, to be paid in September, is however subject to approval by shareholders during the annual general meeting scheduled for August 29.

In November last year, the company paid up to Shs200 million in interim dividends to its shareholders. For the period ending June 30, Uganda Clays recorded a profit-before-tax of more than Shs3.6 billion.

The company’s sales went up by 16 per cent while earnings went up by 37 per cent compared to what was recorded during the same period last year, according to a statement by Company Secretary Mr Charles Rubaijaniza.

The statement shows that shareholders’ funds for the same period increased to Shs23.7 billion compared to Shs11.7 billion for a similar reported period.

The company attributes the increase in the shareholder funds to the share premium that resulted from the Rights Issue concluded during the reported period.

“The most outstanding feature of the first half of the year has been the race to beat the deadline in opening the Kamonkoli factory which we hope will be operational before end of August 2008,” read the statement in part.

The new factory, according to Mr Wafula, will be commissioned before the end of next year, a development that will take the construction industry to a higher level.

Mr Wafula also revealed the company’s plans to buy into a business in Rwanda in a bid to expand its frontiers into that market.
“Negotiations on this matter are underway and our technical team has already done its part. We hope to conclude the negotiation process by end this month,” Mr Wafula said.

He also said that plans to finalise arrangements to acquire a competitor’s business in Uganda are on course. “Both plans are of course contingent upon completing due diligence and agreeing on price terms for both ventures as we intend to invest in them on a going-concern basis,” the statement said.

The company has already set foot in the Southern Sudan market with the opening of a sales office. UCL’s good performance both in the market and as a listed equity on the USE epitomises the excellence in the construction industry in Uganda and underlines its own contribution as a major player in the economy.
Source: © 2008 Monitor Publications Ltd