Red Star Express Board of Directors at the weekend announced that it has recommended payment of N236 million to shareholders of the company as cash dividend for the immediate past year. The company had distributed same amount in the previous year.
Shareholders will receive a dividend per share of 40 kobo, implying a dividend yield of 6.7 per cent on the company’s closing share price of N6. Red Star Express’ share price rose by 5.0 kobo or 0.84 per cent to N6 at the weekend.
Key extracts of the audited report and accounts of Red Star Express for the year ended March 31, 2018 showed decline in the bottom-line. Group turnover rose from N7.3 billion in 2017 to N8.41 billion in 2018. Profit before tax, however, declined from N653.2 million in 2017 to N610.59 million in 2018. After taxes, net profit dropped from N426.76 million to N347.56 million.
Red Star Express had secured shareholders’ approval to transit to holding company and raise additional capital. The new capital raising could be raised through debt issue, equity issue or a combination of both equity and debt.
The Group include three subsidiaries- Red Star Freight Limited, Red Star Logistics Limited and Red Star Support Services Limited. The group principally engages in courier services, mail management services, freight services, logistics, warehousing and general haulage.
Its Chairman, Dr Mohammed Koguna, has said the company plans to change its operating structure from group to holding company to reflect its business expansion and other emerging opportunities.
According to him, the change to holding company is necessitated by the various initiatives the company seeks to explore and the need to have a more structured accounting system.
“These are part of the company’s expansion plans aimed at taking full advantage of business opportunities,” Koguna said.
Koguna, who owns the largest equity in the company, said the group has identified some growth platforms that will become full subsidiaries in the years ahead.
“We will continue to be innovative so as to ensure the steady growth of the company, which would bring about sustained progression in terms of returns on investments. Our watchword in the management of both our human and capital resources will be to focus on cost efficiency, and concentrate on opening new horizons that will ensure we remain the market leader in our industry,” Koguna said.