Apollo to give shares for dividend

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Apollo Investment Fund (APOL) announced that it will give 1.95 free shares for every 100 shares held in lieu of dividend from the total of shares that it has purchased during the last three years under its share buyback scheme.

APOL, which is the only investment company to report profits for 2003 and 2004, amounting to CYP 50.344 and CYP 297.903 respectively, has also become the only investment company to pay a dividend for 2004.

The proposal is subject to AGM approval on April 20, 2005.

The company said it will use the 910.781 shares purchased at a cost of CYP 141.827 or 15.6 cent from 2002 until 2004 under its share buyback scheme to give the dividend in the rate of 1.95 per 100 shares.

While the total listed share capital of APOL amounts to 47.713.199 shares, the company having deducted the buyback shares amounting to 910.781 calculates its listed shares at 46.802.418.

Under the 1.95 per 100 ratio, the total number of shares to be issued as dividend would have amounted to 913.000, but because the company will withhold the 15% defence tax on dividends for private individuals, then it calculates that in fact it will issue some 820.000 shares as actual shares to be distributed to its shareholders.

The 15% defense tax will not be settled by the company selling the shares in the market, but will be paid in cash from the company’s CYP 1.4 mln in cash holdings as at December 31, 2004.

Moreover, the company is disposing the dividend shares at cost of purchase of the buyback shares and not at 23 cent nominal value. The company is also one of the few to distribute about 100% of its available for distribution reserves, which as at end of 2004 amounted to CYP 143.000.

The addition of some 820.000 shares on the existing 46.802.418 shares will mean a tiny 1.8% to 2% dilution, which should be more than compensated by expectations of a strong performance during 2005 and the prospect that for 2005, Apollo will pay a dividend in cash.

The fact that the company holds 18% of its portfolio in Bank of Cyprus shares, up more than 25% since the start of this year and another 9% in Laiki Bank, up more than 20% coupled by continuing strong performances in international markets where APOL is heavily invested, means the outlook for this investment company is extremely positive.

The Fund Managers of Apollo are Laiki Investments, probably the best in the market.