Timothy
Business Writer
SEED-CO International Limited (SCIL) is seeking to purchase 10 percent own shares by way of on-market Share Buy Back and retain the shares for treasury purposes.
The resolution to purchase the shares is set for approval by shareholders at an annual general meeting for the group to be held on August 25, 2021.
“The proposed share buyback will be made by way of one or more on-markets Share Buy Back Transaction, transacted on the Botswana Stock Exchange (BSE) and or the Victoria Falls Stock Exchange (VFEX) trading system, from time to time,” the company said in a circular.
A buyback occurs when the issuing company pays shareholders the market value per share and re-absorbs that portion of its ownership that was previously distributed among public and private investors.
SCIL listed on the Botswana Stock Exchange in 2018 and in 2020 became the first to list on the new United States dollar-denominated Victoria Falls Stock Exchange.
According to the circular, the ordinary share capital of the Company is 381,452,827 and the number of shares that will be acquired will not exceed 381,145,283 consisting of 10 percent of the entire issued share capital of the Company.
“The company may use internal funds to finance the share buy backs and this will not exceed US$10, 2 million,” said the company.
The circular reads that SCIL’s shares on the BSE have not changed in the last 30 days at BWP 2,70.
SCIL in a recent trading update said it expects improved profitability for the full year to March 31, 2021, mainly driven by improved sales volume performance.
“The group’s profit before tax from continuing operations for the full will be approximately 40 percent to 50 percent, that is between US$4,2 million and US$5,2 million better than the profit before tax from continuing operations amounting to US$10,4 million for the corresponding period ended March 31, 2020 mainly due to improved sales volume performance,” the company said.
According to its 2020 annual report, SCIL posted turnover of US$71 million, which was 19 percent above prior year while operating profit of US$12 million and Profit before Tax of US$9 million both increased by 74 percent as compared to prior year.
The group noted that the performance was boosted by the increased seed demand in the region after the severe drought experienced in 2019.
In addition, exchange gains on foreign denominated receivables contributed positively to the financial performance for the year.
Bongani Ndlovu